When it comes to demand for apartment growth in America’s suburbs, don’t mess with Texas. A new report shows that 16 of the top 50 such markets for construction of multifamily complexes with 50 units or more in the past five years are in the Lone Star State.
That includes six of the top 10: Frisco, McKinney, Farmers Branch, Spring, Grand Prairie, and Garland. Spring is a Houston suburb, while the other five are suburbs of Dallas. Among the top 50, suburban Dallas claims nine, while Austin has five suburbs on the list, and Houston has two.
In the top five, the only two not in Texas are the Las Vegas suburb of Spring Valley and the Phoenix suburb of Chandler.
Garden apartments flowering across the land
The list comes from RentCafe and is based on analysis of data from sister company Yardi Matrix. While the trend was already underway, real estate investors can expect more of the same moving forward.
“With coronavirus causing a shift toward work-from-home for countless companies across the U.S., the suburbs have a newfound appeal for renters because they offer an abundance of space, larger apartments and homes, and often lower rents than big cities,” the RentCafe report says.
The report also shows that nationwide, the most common type of new apartment construction in the suburbs listed are garden-style apartments.
The Salt Lake City area has two -- and so does all of California
While it’s only a single snapshot of one kind of suburban growth we’re seeing now, it does show an interesting mix of major and not-so-major metros sharing the love.
For instance, 12 of the top 20 suburbs are no more than 20 miles away from an urban center. Also, among the top 20, only Longmont, a suburb of Boulder, is not in a market of a million people or more. But among the top 50, there are more suburbs listed in South Carolina (three) than New York and Pennsylvania combined (two) and the same number in the Salt Lake City suburbs as in the entire state of California at two.
Only a smattering are in the big Northeastern metros. That includes King of Prussia, Pennsylvania (Philadelphia) at eighth; Tysons and Fredericksburg, Virginia (Washington, D.C.) at 10th and 31st, respectively; Quincy and Revere, Massachusetts (Boston) at 17th and 46th, respectively; and Yonkers, New York (New York City) at 36th.
The Millionacres bottom line
The RentCafe report is one more piece of evidence that the move to the suburbs is real and widespread. Rising house prices, the ability (and often, requirement) to work from home for millions, and attractiveness of living in new, amenity-rich digs points to investing in such construction directly or through real estate investment trusts (REITs) as having real potential for nice returns, both now and going forward.