As of the first quarter of 2024, the multifamily market has shown a mixed performance across different regions of the United States, with some areas demonstrating remarkable resilience despite broader economic uncertainties. Moody’s CRE has analyzed the year-to-date change in effective revenue for the top 82 primary multifamily markets, shedding light on the areas that are currently excelling in this sector.
Northeast Leads the Way
The Northeastern region emerges as a standout performer, being the only region to report a positive change in effective revenue at 0.49%. New Haven, CT, takes the spotlight with the largest increase in effective revenue at 1.5%, signaling strong growth in this market. This region’s success is attributed to declining vacancy rates (albeit modestly) and positive effective rent growth.
Southern Atlantic Region Holds Strong
The Southern Atlantic Region also shows strength, with two of its metros among the top five performers. Columbia, SC, reported the strongest year-to-date growth at +5.2%, indicating a robust multifamily market in this area. Despite challenges in other regions, the Southern Atlantic continues to demonstrate resilience in the face of economic headwinds.
Metro Highlights
Columbia, SC's impressive performance is mirrored by Wichita, KS, which saw a solid increase in effective rents despite a slight uptick in vacancy rates. This demonstrates the ability of these markets to maintain stability and growth even amidst minor challenges.
One notable factor contributing to the success of these top-performing markets is a balanced approach between effective rent growth and occupancy rates. While some areas experience slight increases in vacancy rates, this is offset by significant growth in effective rents, highlighting the overall strength of these markets.
Overall, the multifamily sector is projected to see annual effective revenue growth in the high-1% area for 2024. Despite ongoing challenges, the resilience demonstrated by the top-performing markets suggests a positive outlook for the multifamily sector as a whole.
In conclusion, the multifamily market is showing resilience in the face of economic challenges, with certain regions and metros performing exceptionally well. The Northeast and Southern Atlantic regions stand out as leaders, with strong growth in effective revenue driven by a combination of factors including declining vacancy rates and positive rent growth. Despite uncertainties in the broader economy, these top-performing areas showcase the continued demand for multifamily housing and the strength of these markets in meeting that demand.
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