Check out this map highlighting the most active tertiary markets for apartment development. Multifamily construction isn’t just a major market thing. It’s not just a Sun Belt thing. It’s all over the country at multi-decade highs or all-time highs. Lots of focus typically goes to big markets like Seattle and Austin. But what about tertiary markets?

Note the nation’s leaders for apartment construction (on an inventory growth basis, adjusting for market size) are heavily concentrated in and around the Mountain region of the country.

Lots of buzz around Boise ID, but look at others like Bozeman MT, Provo UT, Colorado Springs CO, Greeley CO, Billings MT, Coeur d’Alene ID and Rapid City ID. Sioux Falls ID up there too.

And West region markets like Santa Fe NM, Prescott AZ and Bremerton WA.

The Southeast has surprisingly few entrants on this list (and none in Texas!?) led by Ocala FL, Huntsville AL, Lakeland-Winter Haven FL and Jacksonville NC. Just missing the cut were: Gainesville (GA, not FL), Sarasota/Bradenton FL, Port St. Lucie FL, and Asheville NC.

All of these have been hot demand markets since COVID (and most were attractive pre-COVID, too), but certainly will get tested in the short run by supply. Smaller markets tend to take an outsized hit in the short run as supply delivers. BUT most of these are likely well positioned longer term.

Our view is that the “Zoom towns” and tertiary markets with attractive long-term demand drivers and a nice job mix (not just a one-trick pony spring break town) should thrive in the next cycle.

apartments #multifamily #construction #housing