Via Trey Wheeler on LinkedIN – link to Trey at bottom.
I highlighted this research and observation from Mr. Wheeler as my hometown Sarasota, FL is top of the list!
This chart from ApartmentIQ tells the story of Multifamily since 2023 using numbers instead of words. Here are four key takeaways:
1. The Supply Gap Is Hard to Ignore
The 14 metros that built the most since January 2023 (10%+ of their existing stock) have a median rent growth of just +0.1% today. However, the 14 metros that built the least are at +3.8% (!!). And if you’re thinking San Francisco’s AI boom is skewing that number, I did too so I checked. But the median is unchanged even after removing SF.
2. Low Supply Has Been a Safe Harbor
All 14 of the lowest supply metros (Riverside to Detroit) have positive rent growth today. On the flip side, every one of the 13 metros that’s flat or negative built at least 5.5% of its stock since 2023. Low supply doesn’t guarantee positive rent growth, but high supply almost guarantees negative rent growth.
3. Similar Supply ≠ Same Outcomes
San Antonio and Kansas City built about the same percentage of stock (9.4% vs. 8.6%), yet San Antonio rent growth is at -3.6% while Kansas City is at +4.5%. Houston and Tampa are both at -1.6%, while St. Louis (+4.9%) and Milwaukee (+6.6%) are thriving at similar supply levels. This is where the demand side of the equation becomes apparent, and important.
4. Elevated New Supply Requires Strong Demand
Charleston added 12.3% to its stock and still has +5.9% rent growth, the best of any high-supply metro. Columbus added 15.0% and is still positive at +1.7%. In number 2 above I wrote “almost guarantees negative rent growth” because there are outliers where demand keeps pace with, or exceeds, elevated new supply. But, I wouldn’t bet on this as a thesis.
Why is the Midwest handling new supply better than Texas/Florida?
Will high-supply metros get back to 3%+ rent growth in 2027?
– Trey
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In partnership with ApartmentIQ (link in the comments below)
📩 p.s. I go deeper on supply and rent trends every Saturday in The Multifamily Download. Subscribe here for free → treywheeler.co
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