When Jay Parsons talks about where apartment deals still make sense, he is not pointing to the usual headline markets. On a recent episode of his Rent Roll podcast, the economist said that some of the most compelling opportunities are hiding in plain sight: submarkets that saw very little construction during the last cycle but have clear demand drivers. Places like Torrance in L.A.'s South Bay, Ventura County, affluent suburbs of Portland and pockets of Louisville are suddenly getting a closer look.
Those markets share a simple profile. They are not cheap land plays on the edge of growth. They are established, often affluent areas that, for a mix of political, zoning or capital‑allocation reasons, were largely bypassed when money poured into Sun Belt boom metros and CBD towers. Now, with conventional starts down sharply and lenders wary of oversupplied nodes, that lack of recent development is starting to look like a competitive edge.
What 'Overlooked' Really Means
Parsons distinguishes "overlooked" and "ignored for good reason." Some zip codes did not see new construction because the demand was never there. Those still do not pencil. The submarkets he has in mind look different: tight occupancies in older stock, solid incomes and job access and very few 2020–2024 deliveries.
South Bay's Torrance is one of his West Coast examples. It sits within a deep, diverse employment base and benefits from demand for coastal lifestyles, but it has not seen the kind of multifamily building spree that hit other parts of the greater Los Angeles area. Ventura County falls into a similar camp. It is not a discovery play; it is a structurally constrained coastal market where relatively modest new supply can still move the needle.
Around Portland, he points to affluent suburbs that check all the usual boxes—schools, access to job centers, established housing stock—but largely sat out the last big run of new units. Louisville shows up on his list as well, with specific submarkets seeing a recent spike in starts off a very low baseline. In each case, the demand story was there; the capital story was not.
Why These Nodes Work In This Cycle
The macro backdrop is doing a lot of the work here. Nationally, multifamily starts have fallen by more than half from 2022 levels, with conventional market‑rate product taking the steepest hit. In many of the markets that dominated the last expansion, near‑term deliveries are colliding with softer rent growth and higher financing costs. It is a tough environment in which to justify one more garden deal or to wrap down the street from three others.
In the submarkets Parsons is flagging, the math looks a little different. Because there has not been much new construction in recent years; rather more room exists between what established properties are achieving and what a new, well‑located asset can command. There is also less risk of running into four other lease‑ups with nearly identical product and timelines.
The demand side of the equation is also more predictable. These are not speculative, but "if you build it, they will come," according to Parsons. South Bay's Torrance has long‑standing employment drivers. Ventura County benefits from a mix of coastal and commuter demand. Portland's suburbs offer access to the region's job base and amenities. Louisville's targeted pockets tie back into an established metro economy rather than a single plant or project.
Turning A Concept Into A Screen
For investors, the idea of "overlooked submarkets" only becomes useful if it can be turned into a repeatable filter. Parsons' comments point to a fairly straightforward process.
One step is looking back at the last several years of deliveries by submarket rather than by metro. The aim is to identify areas where new construction volumes materially lag metro averages. From there, the list needs to be narrowed to places where fundamentals actually support new product: stable or rising incomes, job access, and occupancy in existing stock that suggests renters already want to be there.
A second screen is figuring out why the supply was light. If local zoning or entitlement politics kept a lid on development, that can be a positive signal, assuming the jurisdiction is willing to permit at least some new housing. If, instead, past attempts to build stalled because absorption never showed up, that is a different story.
Parsons also notes that some of these "undersupplied but healthy" nodes sit inside otherwise well‑known Sun Belt markets. Within metros that are grappling with high vacancy in certain corridors, there are suburban pockets that, for whatever reason, did not see much building during the last run‑up. The fact that they are adjacent to oversupplied areas does not disqualify them, but it raises the underwriting bar.
A Niche, Not A Silver Bullet
Parsons is not arguing that overlooked submarkets will carry the whole next cycle. On Rent Roll, he groups them as one of several categories where projects are still breaking ground, alongside tax‑incentivized deals, master‑planned mixed‑use, "story" situations with unusual land or capital structures and developments that work mainly because sponsors have meaningfully improved construction efficiency.
But in a market he describes as "brutal" for getting conventional deals to pencil, these quieter pockets stand out because the story is less about financial engineering and more about simple, durable conditions: real demand, limited recent supply and a clear value proposition over the existing stock. For investors trying to position for 2027–2028 deliveries, they may not be the loudest part of the multifamily narrative. They might, however, be among the most resilient.
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