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There continues to be strong holdouts and increasing positive trends in multifamily investing. Even though several major markets saw consistent declines in rent rates and employment, other markets gained from this and produced solid growth trends throughout all of 2020. This indicator, and continued stability of multifamily as an investment vehicle, is being viewed as it always has historically – a reliable investment. Recently, CBRE even released a report forecasting “a return to pre-COVID vacancy levels and a 6% increase in net effective rents” for 2021, along with an anticipated “full market recovery occurring in early 2022”.
If you weren’t already confident about multifamily investing, this is a significant insight to help you in understanding why these investments are a in a class of their own. Unlike retail or office space, multifamily addresses fundamental needs, and this is why it has continued to perform well in comparison to all other assets even throughout a global pandemic. It is one of the safest investments that can be made, respectively.
Looking towards 2021, Yardi Matrix’ also highlighted supporting trends to CBRE’s forecast. The recent National Multifamily Report of December 2020 shows detailed market analysis of year-over-year rent growth from December 2019 – December 2020, as well as forecasted rent growths into 2021. Positive trends are seen in multiple markets; those showing losses are most directly impacted from unemployment during the pandemic, that in turn resulted in increased migrations of tenants exiting more expensive primary markets and moving instead to secondary and tertiary markets with more affordable costs of living. Nonetheless, the fact remains that multifamily investing made it through 2020 with growth and positive gains and will continue to do so into 2021.
Here are the Top 15 Forecasted Markets for Rent Growth in 2021:
15. Charlotte, NC
Forecasted Rent Growth (YE 2021): 2.6%
Current Unemployment Rate: 6.3%
Average Price of an Apartment: $1,284
YoY Rent Growth (2019-2020): 2.2%
14. Baltimore, MD
Forecasted Rent Growth (YE 2021): 2.6%
Current Unemployment Rate: 7.9%
Average Cost of an Apartment: $1,312
YoY Rent Growth (2019-2020): 3.3%
13. Houston, TX
Forecasted Rent Growth (YE 2021): 2.7%
Current Unemployment Rate: 7.9%
Average Cost of an Apartment: $1,102
YoY Rent Growth (2019-2020): -1/9%
12. Philadelphia, PA
Forecasted Rent Growth (YE 2021): 2.8%
Current Unemployment Rate: 8.3%
Average Cost of an Apartment: $1,660
YoY Rent Growth (2019-2020): 2.4%
11. Orange County, CA
Forecasted Rent Growth (YE 2021): 2.9%
Current Unemployment Rate: 7.4%
Average Cost of an Apartment: $2,086
YoY Rent Growth (2019-2020): -0.5%
10. Raleigh, NC
Forecasted Rent Growth (YE 2021): 3.0%
Current Unemployment Rate: 5.7%
Average Cost of an Apartment: $1,250
YoY Rent Growth (2019-2020): 0.0%
9. Nashville, TN
Forecasted Rent Growth (YE 2021): 3.1%
Current Unemployment Rate: 5.2%
Average Cost of an Apartment: $1,399
YoY Rent Growth (2019-2020): -1.5%
8. Inland Empire (Riverside-San Bernardino-Ontario), CA
Forecasted Rent Growth (YE 2021): 3.2%
Current Unemployment Rate: 9.1%
Average Cost of an Apartment: $1,688
YoY Rent Growth (2019-2020): 7.3%
7. Atlanta, GA
Forecasted Rent Growth (YE 2021): 3.3%
Current Unemployment Rate: 7.0%
Average Cost of an Apartment: $1,517
YoY Rent Growth (2019-2020): 3.0%
6. Tampa, FL
Forecasted Rent Growth (YE 2021): 3.5%
Current Unemployment Rate: 6.0%
Average Cost of an Apartment: $1,395
YoY Rent Growth (2019-2020): 3.9%
5. Austin, TX
Forecasted Rent Growth (YE 2021): 3.6%
Current Unemployment Rate: 4.9%
Average Cost of an Apartment: $1,378
YoY Rent Growth (2019-2020): -3.6%
4. Las Vegas, NV
Forecasted Rent Growth (YE 2021): 3.8%
Current Unemployment Rate: 10.3%
Average Cost of an Apartment: $1,155
YoY Rent Growth (2019-2020): 3.8%
3. Phoenix, AZ
Forecasted Rent Growth (YE 2021): 3.9%
Current Unemployment Rate: 7.6%
Average Cost of an Apartment: $1,191
YoY Rent Growth (2019-2020): 4.6%
2. Sacramento, CA
Forecasted Rent Growth (YE 2021): 4.1%
Current Unemployment Rate: 8.5%
Average Cost of an Apartment: $1,529
YoY Rent Growth (2019-2020): 6.1%
1. Indianapolis, IN
Forecasted Rent Growth (YE 2021): 4.4%
Current Unemployment Rate: 5.2%
Average Cost of an Apartment: $932
YoY Rent Growth (2019-2020): 3.5%
Want to Invest with Ellie?
If you are interested in learning more about passively investing in apartment buildings, click here to schedule a call with Ellie Perlman.
About the Author
Ellie is the founder of Blue Lake Capital, a real estate company specialized in multifamily investing throughout the United States. At Blue Lake Capital, Ellie helps investors grow their wealth and achieve double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
Ellie is the host of REady2Scale , a podcast that highlights honest, insightful, and thought-provoking discussions on the multiple approaches for successful real estate investing.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital at www.bluelake-capital.com and learn more about Ellie at www.ellieperlman.com.
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