An unprecedented wave of deliveries in the Sunbelt appears to be cresting this year, but absorption will need to continue at a record pace to keep up with the new supply.

“There’s still a lot of absorption to be had with deliveries from last year to lease up,” Curci said. “There are a ton of concessions in place that are going to take a year or two or possibly longer to burn off.”

“I’m a little pessimistic that it’s not going to iron itself out in 2025,” he added. “I feel like we’re going to be living with sluggish rent growth in the South and perhaps some tenuous occupancy for the next year or two at least.”

Central business districts in Austin, Nashville and Fort Lauderdale are digesting a huge influx of inventory but a steep decline in permits and entitlements for new multifamily projects in the Sunbelt had several owners on our panel expressing confidence that 2025 will be a year of “readjustment” in the region followed by stronger performance in 2026 and 2027.

“I don’t like to paint entire markets with a broad brush and say the entire metro is unhealthy. We certainly have supply problems in Charlotte and Austin,” said Patrick Gniadek SVP of investments at AvalonBay Communities.

“Austin has been softer, but I’m finally buying in Austin in earnest where I had been sitting out for the past few years, because I think it’s finally okay to get back into the water."

The owners said that recent leasing data indicates that multifamily markets, including Nashville and Tampa have “turned a corner."

The Solomon Organization has been buying multifamily assets in the Midwest, where attractive cap rates can be had and there are fewer supply issues.

“There’s also more affordability, so the people can pay the rent and the deals are going to stay occupied,” said Zach Solomon, managing director.