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In the third quarter of 2022 we are continuing to see multifamily rates increase across the board for most metro areas compared to last year. There could be many reasons for this, one being that we are seeing an influx of new multifamily properties being constructed. According to RealPage, the building of apartments is projected to hit a 30-year high this year, with an additional 427,000 units expected to finish construction in 2022. Furthermore, according to the Dodge Construction Group, there was $116.4 billion in new project volume in 2021 – up 25% from 2020. However, this influx of new multifamily buildings and the resulting increase in vacancy rates is not being felt evenly across the country.
The five metro areas with the lowest multifamily vacancy rates are as follows:
- Duluth, Minnesota (1.5%)
- Charleston, West Virginia (2.0%)
- Green Bay, Wisconsin (2.0%)
- Long Island, New York (2.1%)
- Santa Barbara/Sta Maria/Goleta, California (2.1%)
The five metro areas with the highest multifamily vacancy rates are as follows:
- Huntsville, Alabama (14.1%)
- Coeur D'Alene, Idaho (13.9%)
- Corpus Christi, Texas (11.7%)
- Beaumont/Port Author, Texas (11.6%)
- Augusta/Richmond County, Georgia (10.6%)
Out of the areas measured, Coeur D'Alene, Huntsville, Augusta, Reno, and Pensacola saw their vacancy rate increase the most since the start of the pandemic. These cities had their multifamily vacancy rate increase by 8.6%, 8.6%, 2.6%, 2.1%, and 1.8%, respectively. This is not because of people leaving the area and emptying buildings; instead, the increase in vacancy is primarily due to active new apartment construction in anticipation of new arrivals to these areas.
While most metro areas had their vacancy rate increase since the start of the pandemic, a few managed to decrease their vacancy rate. South Bend experienced the most occupancy rate gains since Covid, lowering its vacancy rate by 6.6%. Some other cities which saw their vacancy rate decrease the most include Peoria (-5.1%), Baton Rouge (-4.8%), Kingsport (-4.6%), and Charleston (-4.3%).
Below are all 139 metro areas CoStar measured. The first few pages are the metro areas ranked in order from lowest vacancy rates to highest vacancy rates, and following that is the change in vacancy rates from the pre-Covid times of Q1 2020 to Q3 2022.
