THE TOP 10 BUY, SELL MULTIFAMILY MARKETS TO WATCH

July 22, 2016

Some experts consider multifamily to be the most stable of real estate assets, known to provide higher yields with less risk. And with the volatile nature of the global marketplace this year, investors are looking to make secure bets. Take a look at Bisnow’s list of the top 10 multifamily markets to buy and sell property in, aggregated from Ten-X’s US Multifamily Market Outlook report.

Buy: Orlando, FL

Thanks to a thriving economy, Orlando has experienced a 4% increase in year-over-year job growth—and unemployment has dropped to the mid-4% range. Ten-X says multifamily construction is at a 10-year high for the second consecutive year and apartment demand is outpacing development. Rents have jumped by 6% while vacancies fell to 5.7%.

Buy: Phoenix, AZ

With its population up by 2% in 2015, apartment demand in Phoenix is also on the rise. Rents jumped 5.9% year-over-year and Ten-X projects that will continue through 2018. The city’s metro area is booming with job growth up by 3.5%, its professional and finance sectors jumping to 6.4% in year-over-year growth.

Buy: Atlanta, GA

Atlanta’s economy has showed signs of cooling this year, but its metro areas are still thriving, with shrinking unemployment and increased job growth. With the boost in job growth came a higher demand for apartments—vacancy rates dropped to 5% in 2015 and the population grew by 1.7%. Ten-X projects investors net operating income will jump 4% each year through 2018, before a cyclical slowdown in 2019.

Buy: Fort Lauderdale, FL

Fort Lauderdale’s hot market experienced a 4% jump in job growth early this year. Apartment vacancies will likely fall within the 3% range by 2018, Ten-X projects. And the finance and professional services sector—which drives local commerce—grew by 6%.

Buy: Las Vegas, NV

Though known as the ultimate tourist location, its multifamily investments are on the rise, seeing a 4.2% decline in vacancies and a 2.2% jump in the city’s metro area population. Vegas has seen massive growth, particularly in its health and education sector, which has posted an 8.4% increase as of early this year.

Sell: New York, NY

Though New York City remains healthy—posting drops in unemployment—its population growth is lagging, and Ten-X projects the market will exceed 10% in vacancy rates by 2017. The rise in vacancies will also shrink apartment rents—which at present have risen by 4.5%.

Sell: Pittsburgh, PA

Supply has outpaced demand in Pittsburgh since 2012, driving vacancies up by 4.5%, and Ten-X projects within the next three years vacancy rates will grow to more than 6%. Also sluggish is the city’s employment growth, which likely won’t grow by more than 1% through 2019.

Sell: San Francisco, CA Though the city is booming with employment rates up by 4% since 2015, today’s 4.6% in vacancy rates is expected to grow to 8% by 2019, due largely to robust development outpacing demand. On another note, rents jumped to a cyclical high of 10.9% in 2015.

Sell: Miami, FL

Miami’s economy is cooling, even with its 6% decline in unemployment. Apartment vacancies are up by 5% and expected to jump to 8% by 2019. Investors net income is projected to increase by less than 2% through 2018.

Sell: Nashville, TN

Though Nashville rents have jumped by 4.5% within the past year, apartment vacancies are also on the rise, climbing 80 basis points. Ten-X estimates vacancies will persist, jumping to more than 9% by 2019. Still, Nashville’s economy has shown signs of strong economics within the year, posting 3.3% growth in employment.