Montgomery Apartments Could Lose Some Steam

  in   Insights

The apartment market in Montgomery, AL has performed well in the past few years, but there’s some downside risk in the forecast. Out of the nation’s largest 150 apartment markets, Montgomery is the smallest, with less than 22,000 existing units, which leads to some volatility in the market. As of 2nd quarter, Montgomery’s apartment market looked solid, with occupancy well ahead of the long-term average at 95.7% and annual effective asking rent growth at a two-decade peak of 7.9%. However, those strong fundamentals are expected to wane in the near term. Occupancy is slated to drop to 95% by the end of 2021 and get closer to the typical market average around 93% by 2023. Rent growth should also fade, but will remain solid by historical standards, getting down to 7% by the end of the year and then hovering around the 3% mark for a few years after that. Keeping market fundamentals from straining too badly in the near term in Montgomery is a solid employment base anchored by government and military jobs. This market has recovered well from the recession brought on by the first wave of the COVID-19 pandemic, with an employment base that is only 3.2% away from pre-pandemic levels.