Sun Belt Dominates Healthy Multifamily Markets
Sun Belt multifamily markets including Las Vegas, Dallas and Miami are particularly well positioned for the year ahead, said a new report from Arbor Realty Trust and Chandan Economics.
The report, 2021 Top Markets for Large Multifamily Investment, said work from home resiliency and a recovering tourism industry propelled Las Vegas to the top among large U.S. multifamily markets.
“As a region, the Sun Belt generally ranked well across the matrix factors measured despite experiencing higher COVID-19 case counts per capital,” the report said. In addition, four Florida metros jumped significantly in the rankings, “reflecting the state’s continued strong labor market performance despite pandemic disruptions.”
The report noted the ongoing pandemic has dominated the market-level investment narrative since mid-2020. “However, national and local economies have learned to cope with the pandemic more effectively and its impacts are less disruptive,” it said. “Moving into 2022 and beyond, fundamentals of supply and demand along with traditional considerations of labor growth and productivity, residential affordability and the attractiveness of markets to new businesses and residents will take center stage.”
One COVID-19 side effect could affect large multifamily markets, particularly coastal gateway markets: the work-from-home movement. “As employers call workers back to the office and commute times become relevant once again, the demand for apartments in coastal gateway markets will continue to recover,” the report said. “However, if work-from-home policies become permanent within companies, these markets would likely be negatively impacted.”
But a potential boost for coastal gateway markets does not mean the Sun Belt’s growth will reverse, the report said. “Sun Belt markets will remain attractive and continue to grow due to their relative affordability and appeal to renters with the means and flexibility to relocate. However, the growth rate across these smaller markets will likely return to a more normal pace.”