Apartment investors that have been drawn to booming markets like Austin and Tampa are beginning to see signs of a turnaround as the oversupply of new apartments—and the resulting decline in rents—starts to stabilize. According to a new report by CBRE, urban markets in the Sun Belt experiencing significant renter growth and apartment construction are showing early signs of rebalancing, with occupancy rates and absorption levels starting to level off.
Nearly 70% of the total apartment supply in these rapidly growing areas, and Salt Lake City, has experienced negative rent growth since the third quarter of 2023, CBRE found. However, demand for housing in these areas continues to surpass the rate of new apartment construction, leading to decreased vacancy rates and a potential for positive rent growth.
"Nearly all high-supply markets with negative rent growth are expected to see positive rent growth and stable vacancy rates by mid-2025," the report stated. "The exception is Austin, where a sharp increase in new suburban supply is likely to sustain negative rent growth until Q3 2025."
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.