The year 2023 could be considered the first relatively normal year since the onset of the pandemic, following two years of record performance within the multifamily market. The sector still advanced but at a slower pace. Going into 2024, the multifamily industry faces a mixed outlook. Last year’s main challenges persist—rising inflation, interest rates and high expenses, as well as a looming economic slowdown. In addition, the multifamily market had some 1.2 million apartment units under construction at the start of 2024, 510,000 units of which are expected to come online by year’s end. Therefore, supply expansion will play a great role in the market’s performance on a metro level.
Using Yardi Matrix data, we looked at what smaller markets saw performance in a few key areas and have positioned themselves for further growth. We analyzed employment, deliveries and the construction pipeline, occupancy performance and levels, as well as property values, looking at average per-unit prices. Each of these metrics was assigned a final score, which created our ranking. Here are 2024’s top 10 emerging multifamily markets in the U.S.
1. Omaha, Nebraska
The Gateway to the West scored highest in our ranking. The third most populous metro on the list, Omaha had 4,506 units delivered in 2023, which is the second largest volume by unit number among the markets in this cohort. Occupancy remained tight at 96.0 percent as of November, following a small 40-basis-point decline year-over-year. Strong demand for apartments boosted the pipeline, with developers having 8,000 units under construction in December, the second largest pipeline in this list.
Economic activity was moderate, with the employment market expanding just 1.5 percent in the 12 months ending in October, trailing the 2.3 percent U.S. rate. However, the jobless rate stood at 2.5 percent in November, the tightest job market among the metros in this analysis, and well ahead of the 3.7 percent national rate, according to data from the Bureau of Labor Statistics.
Omaha is one of the most affordable multifamily markets nationally, and the most affordable one in this group. The average price per unit as of December clocked in at $130,739, following a solid 15.4 percent increase year-over-year. Meanwhile, the U.S. rate decreased 11.3 percent to $185,172. Overall, investors traded $275 million in multifamily assets in Omaha in 2023.
2. Greenville, N.C.
Located 101 miles from Charlotte and 145 miles from Atlanta, Greenville is the fifth most populous on this list, with nearly 1 million residents. Developers delivered 3,646 units last year and had a strong pipeline underway, amounting to 6,563 units as of December. The metro’s occupancy was at 94.0 percent in November, falling by 75 basis points year-over-year.
Similar to Omaha, the metro’s employment market expanded by 1.5 percent in the 12 months ending in October, with the 2.9 percent unemployment rate outperforming the U.S. rate by 80 basis points, according to BLS data.
The average per-unit price was up by a hefty 22.3 percent year-over-year in December to $195,802, just above the U.S. figure. Investors traded $655 million in multifamily assets in 2023 in Greenville, which is the second-largest volume among the metros in this ranking.
3. Southwest Florida Coast
The region represents the contiguous space below Tampa-St. Petersburg, down and consists of the Fort Myers and Sarasota markets and surroundings. It’s the fourth most populous entry in this list, just behind Omaha. A sought-after geographic location, the area is very appealing to developers, leading all other metros in this group by units delivered, with 5,463 apartments coming online in 2023. More so, the construction pipeline had a substantial 16,166 units underway in December, the highest volume in this group. This robust supply expansion left a mark on the occupancy rate, down 2.6 percent year-over-year as of November to 94.0 percent.
The employment market expanded 2.2 percent year-over-year as of October, only behind Knoxville in this ranking, just 10 basis points below the U.S. rate. The jobless rate stood at 3.3 percent in November, leading the U.S. by 40 basis points.
Among the least affordable multifamily markets in this group, Southwest Florida Coast’s price per unit rose 15.3 percent year-over-year in December to $276,371, considerably above the $185,172 national average. Investment activity was elevated in the area, with an investment volume of $872 million, the highest in this group.
4. Wilmington, N.C.
One of the smallest metros in this ranking, Wilmington is the gateway to Cape Fear Coast beaches. In 2023, developers brought online 1,071 units and had a considerable…
Read More: Top 10 Emerging Multifamily Markets