Multifamily investors recently asked John Burns Real Estate Consulting which challenged multifamily markets are best markets for long-term investments?
“To answer the question at hand, we tailored the model to spotlight multifamily markets facing short-term stress—characterized by modest or even negative rent growth, below-average occupancy levels, and cap-rate expansion since early 2022—but strong long-term fundamentals,” write John Burns consultants in their newsletter.
Markets to watch
Among the top 10 markets. there are some special ones to watch. John Burns consultants say the top markets “have been challenged lately with soft rents, falling occupancies, and rising cap rates.”
However, many show long-term demographic growth with new supply now declining.
No. 1 – Austin
“Despite current headwinds from elevated supply, the fundamentals—demographics, job growth rates more than twice the national average, and long-term appeal—make Austin a strong bet for future rent growth,” writes Michael Kenney, senior consultant.
No. 6 – Nashville
“Nashville has faced heavy supply pressure for longer than many other markets, but strong in-migration continues to support demand. We’re already seeing signs of improvement. Supply being absorbed and fewer new projects in the pipeline signal a strong long-term outlook,” writes James Penner, vice president.
No. 9- Charlotte
All top 10 “challenged” markets have seen rents fall in recent years, but Charlotte’s fell just 0.3% despite having the highest share of units under construction (8.5% of inventory). With a solid economic base and relative affordability, Charlotte should keep attracting new residents and remain a strong long-term opportunity.
About the author:
For more information, visit John Burns Real Estate Consulting. “We help clients address strategic decisions like this with our proprietary JBREC Market Ranking Model, a tool we customize for clients across all housing sectors to help strategize investment decisions.”
