If a new apartment investment is on your agenda in the coming months, keep Atlanta in your sights. According to new data, the Atlanta market is seeing record-level demand. As RealPage's Julia Bench put it, "The Georgia market claimed the nation's top spot for apartment demand during a time when many markets are struggling during the COVID-19 pandemic and recession."
In the third quarter of the year, demand for Atlanta apartments came in at 10,400 -- above 2019's numbers and a break from the typical third-quarter slowdown. Additionally, the city also saw an 87% absorption rate, its highest numbers in over two decades.
More than Atlanta
Dallas-Fort Worth and Houston should also be on your radar if you're considering a new multifamily investment. When combined with Atlanta, the three markets accounted for a whopping 17% of all apartment demand in Q3 alone.
Other cities with solid demand included:
- Charlotte, North Carolina
- Portland, Oregon
- Las Vegas
Cities in the Sun Belt have been performing particularly well, RealPage's data suggests -- likely due to the quicker employment bouncebacks these markets saw after pandemic shutdowns lifted.
Where to steer clear
Gateway markets are feeling the burn. New York saw nearly 12,000 units vacated in Q3, while San Francisco saw a loss of more than 3,600 apartment households over the same time frame.
Seattle, Chicago, and Washington are also underperforming -- logging "essentially no demand" at all across the third quarter.
Another point of note: Apparently, low-rise apartments are performing better than mid- and high-rise ones as of late. Rents on midrises only dropped 1.5% in September, versus the deeper cuts of 8.1% and 4.4% on high-rise and midrise properties, respectively. If you're on the fence about what type of property to buy -- not just where to buy it -- this might give you a good idea.
The bottom line
Successful real estate investing is all about location — especially in a volatile time like this. Before you make moves on your next investment property, make sure you have the latest market-level data at your disposal. You should also work with a local real estate agent to get on-the-ground insights into the market's potential and rental trends.