Our Economists’ Picks for Favorite Apartment Markets in 2024
In calendar 2024, U.S. apartment supply could be the determining factor in the fundamental health of multifamily markets across the nation.
The volume of new apartment supply hitting the market in 2024 is expected to be incredible at approximately 670,000 units, blowing past 2023’s already record deliveries of about 440,000 units. Other factors will also play a role in market-specific performance, like job growth, which has continued to outperform economists’ expectations, and consumer sentiment, which has improved, leading to increased demand for housing.
But with record apartment supply in 2023 and another round that will beat those levels by 50% in 2024, markets where supply is more reasonable and less drastic will have an advantage.
With all that said, which markets do RealPage economists expect to outperform in 2024?
Among the early favorites set to lead the nation in the near term, most are stable Midwest markets like Chicago, Cincinnati, Cleveland and Columbus, with Northeast metros Boston and New York also included. These are all markets that ended 2023 with occupancy above 94%. Average annual effective asking rent change was also well above national norms in calendar 2023, with Cincinnati, Boston and Chicago logging nation-leading rent growth just under 4%. Construction has also remained reasonable in these markets in 2023, and scheduled inventory growth for 2024 is relatively modest.
Some markets that could have a surprising upside in 2024 include Houston, San Diego, San Jose and Washington, DC. In Houston, the supply to demand ratio has been relatively balanced recently, with supply ratios ranking below the national average. In fact, Houston could top the other Texas markets in the near term.
Washington, DC is expected to outperform in 2024, which would be the first time in quite a while this market achieved that feat. While there’s a lot of supply planned for this market, it’s fairly concentrated in a few key submarkets. In 2024, Navy Yard/Capitol South, Northeast DC, Crystal City/Pentagon City and Bethesda/Chevy Chase are all slated to get at lease 1,600 new units. Meanwhile, a third of DC’s submarkets will see no new supply in 2024.
Markets that could see some potential demand challenges in 2024 include West region metros Las Vegas, Los Angeles, Portland, San Francisco and Oakland. These markets all logged rent cuts in calendar 2023 and logged occupancy between 94% and 95%. In these markets, supply additions have been relatively reasonable and are expected to remain so in 2024.
In some markets, 2024 demand is expected to be solid, but intense supply could limit rent growth potential. This list includes typical supply heavy hitters like Austin, Charlotte, Dallas/Fort Worth, Nashville, Orlando, Phoenix and Salt Lake City. Inventory growth in the coming year is scheduled to rank above national norms in each of these markets and will be especially sizable – at over 8% – in Austin, Charlotte, Phoenix and Salt Lake City.
Some wild card markets in 2024 could be Atlanta, Miami, Newark, Seattle and Tampa. In Newark, specifically, new deliveries are being swallowed by pent up demand for more affordable apartments for those moving from nearby Manhattan. This is a market that could see a great performance, despite increased supply.
For more information on the state of the U.S. apartment market, including more detailed forecasts, watch the Market Intelligence Webcast: 2023 Year in Review.