Kimberly Byrum, managing principal for multifamily at MFE parent company Zonda, says the apartment industry is going to see even more bullish opportunities and attitudes heading into 2025.
“I think we all expected the big wave of pipeline in 2024, and we were approaching the markets very cautiously,” she says. “And what has happened is we've seen record levels of absorption. The demand has remained strong.”
Byrum notes the industry is benefiting from strong renewal activity and potential home buyers continuing to rent because of higher interest rates and home prices.
“We have one more supply wave in most markets coming,” she says. “I'm hopeful that we work through that rather quickly.”
However, Byrum says she fears that with starts slowing and a lower number of deliveries expected for 2026 and 2027, rents could ramp up again and impact inflation.
“We have sat in a new supply pipeline for two years, and I would hate to see inflation rear its ugly head,” she cautions.
Looking to 2025, she advises developers to be able to articulate the story of their project.
“Anecdotally, we're having a lot more calls with investors to get them comfortable with rents and with the pipeline and where the markets are headed,” she notes. “It’s important to have a succinct message as it relates to new construction projects and what their vision is for that target market.”
Here are five areas Byrum will be tracking in the new year:
- Oil-based economy markets: With President-elect Trump looking to expand domestic oil and gas drilling, she predicts Houston could be a big winner. “I think that we will burn through this supply through the middle of the summer as long as the economy holds, and we will start to see some strong rent growth toward the end of 2025,” she says, adding she’ll also be watching Oklahoma City.
- Other markets to watch: In addition to the oil-based economy markets, Byrum is keeping tabs on Austin, Texas, and Florida’s Gulf Coast for different reasons. While Austin has seen a record level of multifamily deliveries, she says it’s a great place to live. “I'll be rooting for Austin to absorb this supply and make its way back to balance,” she says. On the other hand, she is worried about Florida’s Gulf Coast with the recent hurricanes and how that could impact in-migration.
- A well-located garden deal: Byrum says this is her favorite product type for the near future, especially in looking at the demographics that show more Gen Zers entering the market who aren’t earning incomes yet to support the rents of luxury high-rises. “That just bodes really well for a well-located garden-style deal close to job centers. I think it will be a race to find some great sites in some of those areas,” she adds.
- Innovative construction trends: Byrum says she is encouraged about some of the up-and-coming building trends she’s seeing, such as a 3D-printed build-to-rent development and mass timber projects. “It’s really exciting to see some aesthetically pleasing types of construction that are helping the industry be more sustainable,” she says. “I think that definitely appeals to that millennial renter and certainly the higher-end renter that will pay you for those types of things.” However, she notes she would like to see more modular on the market-rate side.
- Amenity wars: Byrum says she sees wellness and work-from-home amenities—from being close to nature, good sleeping environments, and healthy food options—continuing to be popular. “Wellness trends will continue and definitely appeal to the Gen Xers and the millennials who are still in the rental market,” she adds.
