Turns out that Freddie Mac was correct in predicting that 2019 would be a banner year for multi-family developments. The main two factors making Freddie’s predictions a reality in specific locations are having a solid job market and having steady population growth.

Here are the top five cities for multi-family rent growth and the top five cities for multi-family unit growth, according to Yardi Matrix in two separate recent studies.

Top Five Cities for Multi-Family Rents

The national average for rent costs increased by $3.00 to $1,469 in July 2019 from June 2019. This $1,469 represents an increase in rent costs for +3.4% compared to one year ago.

  1. Pensacola FL experienced a whopping +9.1% increase in rent from July 2018 to July 2019.
    1. Rent increased to a record high of $1,178
    2. Developers anticipate completing an additional 2,000 multi-family units this year.
  2. Wilmington NC experienced a rent increase of +8.1% from July 2018 to July 2019.
  3. Las Vegas NV saw an average increase of +8% in rent.
  4. Phoenix AZ experienced a +7.1% increase in rent with an average rent coming in at $1,171.
  5. Boise ID saw a +7.1% increase in rent to an average of $1,176.

Top Five Cities for Multi-Family Unit Growth

Yardi Matrix estimates that nearly 300,000 units will be added to the multi-family rental pool by the end of 2019. Yardi estimates that 2020 will see new unit growth near that same number in 2020.

  1. Charleston SC is adding 3,600 units this year and anticipates adding the same number in 2020.
  2. Colorado Springs CO is expecting 2,093 new units this year and 2,065 more in 2020. The Springs is seeing a +5% rent increase this year as well.
  3. Salt Lake City is adding 4,246 new units to its multi-family pool this year, or 4.3% of its total inventory.
  4. Raleigh NC, one of the top 10 fastest growing cities in the country, is adding 5,800 rental units this year and 5,723 units in 2020.
  5. Louisville KY is expecting 2,781 additional rental units this year and 2,744 in 2020.

Meanwhile, Austin TX is struggling to keep up with multi-family demand. Occupancy rate is close to 95% on a month-to-month basis and Yardi predicts rent growth to hit +4.1% throughout the remainder of 2019.

Thanks to both Julie Falcon and Maleesa Smith of HousingWire for source data.

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