Housing economists weighed in on multifamily markets large and small to consider for 2025 and beyond at the MFE Conference in Las Vegas at the end of September.
In a discussion led by Kimberly Byrum, managing principal of multifamily at Zonda, Joshua Clark, senior economist at Zillow Group, and Carl Whitaker, chief economist at RealPage, explored markets that are in prime positions for the next three to five years.
When it comes to multifamily markets that might not look the best today but will rally in the long term, the panelists pointed to Charlotte, North Carolina, and Phoenix.
While Charlotte has had a lot of inventory and population growth, Whitaker said not to write it off. “If you’re willing to underwrite negative leverage and you’re willing to hold, I think by year two and certainly by year three Charlotte is going to reward you handsomely.”
Phoenix is more of a risky play, but both Clark and Whitaker touted it for longer term.
“There’s going to be some nervous folks there over the next couple of months because there’s a lot of housing being delivered, especially when you factor in build-to-rent into the equation,” Whitaker said. “I think Phoenix’s economy is more akin to Dallas and Atlanta today than 10 years ago. If you’re looking at a three- to five-year hold, you’re good.”
Clark added Phoenix is still a lot cheaper than California.
“That’s a huge factor that’s going to be in people’s minds,” he noted. “Starts have fallen off. If you’re willing to buy the pain, you have an opportunity to get in on the upswing.”
Large Market Potential
Washington, D.C.
“I make the argument that Washington, D.C., is maybe positioned to be the strongest-performing gateway market for the next three to five-ish years—partially because it has a well-rounded economy and has been long established,” said Whitaker. “One thing I think D.C. is benefiting from maybe more so than other gateway markets is international migration has returned. If you look at domestic migration in D.C., those numbers don’t look good. However, the international migration is enough to make up some of that shortfall. I think that’s a story that is going to continue. I like the international migration story.”
Whitaker noted the strength of D.C. over the next five years comes down to its supply numbers. In 2010-11, it was the first market out of the gate post-Great Recession in terms of where developers were actively targeting, and it ran into a supply overhang before other markets.
“Demand was never the issue, it was being met by a lot of supply before that was happening in other parts of the country,” he said.
According to Whitaker, the 2010s saw 1.7% annual inventory growth, and today that is peaking at 2.5%. Even with today’s figures, D.C. is a leader in rent growth and is absorbing that supply.
“Looking past 2026, we’re forecasting 1% inventory growth, half the level of inventory it was delivering in the 2010s, and that sets the market up for a favorable 2025 and beyond,” he added.
Las Vegas
While Las Vegas might not be on everyone’s radar, Whitaker said it has the reverse of D.C. that it didn’t get its supply pipeline turned back on until 2015.
“It didn’t overdevelop its multifamily inventory to the degree of the single-family or condo market,” he noted.
For the market’s strength, he pointed to job growth, with Sin City leading the country behind Miami, and limited supply.
“Occupancy is still low in the 93% range, but it’s up a full percentage point year over year,” he said. “Momentum is a real thing. Because it was one of the first on the downcycle in 2022, I think it’s going to be one of the first out of that downcycle because it’s not going to have the supply overhang that it’s working through. The entire market only has started 700 units this quarter.”
Columbus, Ohio
Clark and Whitaker were in agreement on Columbus as one of their large market picks.
When it comes to the economy in Columbus, Whitaker said “it really is the most Sun Belt-esque of the Midwest markets.”
The Ohio capital has a good story in terms of retention. According to Whitaker, the renewal rate has been 53% for the past three years, while it was 47% annually in the pre-COVID years of 2015 to 2019. “That new paradigm for retention to me is a strong story. Columbus’ occupancy floor is much higher than it ever was in the 2010s,” he said.
He also added that, historically, one of the cases against Midwest markets, especially if you’re a Class A operator developing a new property, was at some point residents would move to the single-family market.
“That’s very different today. Historically, Columbus was one of those markets where you could find a single-family starter home—median home prices in 2019 were about $195,000. Today, they are $260,000. That’s not expensive by national standards. But if you look at where the price movement has been most significant, again it is on the starter inventory, and there’s just not that much available. And with the lock-in effect, where people have mortgage rates at 2.5%, that inventory isn’t going to come back online any time soon,” he said.
Clark added another plus for the market is the amount of investment being seen, especially with the creation of chip factories that are expected to bring high-quality jobs to the metro area.
“Columbus is such a vibrant place to develop,” he said. “You have people who want to stay in the place where they went to school. You have highly talented people who come out of [The Ohio State University] and work there.”
Miami
The Miami market boasts always being at the top of the international immigration list, strong job growth, and no income tax, said Clark.
“On the supply side, it has really slowed down in the past year on starts. We’re not seeing that picture yet in terms of completions, but in late 2025 and 2026, I think we’ll see Miami see major rent growth,” he noted. “It still has no taxes, it’s a great place to live.”
Clark added that buying and owning a home is more expensive in the metro, especially with increased insurance costs. “That moves the affordability measure quite a bit.”
Riverside, California
The last large market on the list for Clark was Riverside, which has seen a drop-off in supply.
“Riverside has had an element of boom or bust. In five years if you want to be getting in on the upswing, Riverside has those kinds of opportunities,” he said. “Even right now it has its pockets of growth in Riverside proper in the area north of the downtown.”
Small Market Strengths
Fayetteville, Arkansas
The northwest Arkansas market has a lot of upsides, including affordability and economic growth working hand in hand, according to Whitaker.
“It has a big college. It has some strong big-name corporate employers,” he said. “Long term for Fayetteville is it has Midwest-esque affordability. It’s really affordable by most market standards.”
He added local residents are allocating a very small share of their income toward rent.
“All of these things coalesce into a simple takeaway of strong economy and affordability,” he said. “You forecast that out, and simply it’s a good spot to be at.”
Asheville, North Carolina
Whitaker and Clark selected the Western North Carolina market prior to Hurricane Helene’s devastation.
“Obviously keep the folks there in the forefront of your thoughts because it is bad there right now,” Whitaker noted.
Looking at apartment performance, he said Asheville is a one of the rare instances of a Southern regional market that historically has had pretty high occupancy—in the 95.5% to 96% range in the 2010s.
“It’s one of the biggest rent-to-own gaps in the country. The median home price in Asheville is $550,000 as of 2023. It is a very expensive market,” he said. When you think about the economy that’s in place there, which is primarily tourism driven, there’s a big gap between owning and renting, further exacerbated by the economy. I think if you’re looking at apartments, in particular, it’s a good spot to be.”
Clark agreed, saying there are huge construction opportunities with how little has been built right now in the market.
Charleston, South Carolina
Whitaker said at some point Charleston is going to move off the small market list because of its growth over the past decade.
“You look at the development that has happened there over the past 10 years, and it’s truly unbelievable. Sixty percent of Charleston’s apartment units are less than 10 years old, and 25% of it is less than five years old,” he said. “New leases even today are trading out at 3% [rent growth], and renewals are trading out at 5%. Even with all the influx of supply, there’s a lot of demand.”
He said one interesting theme that the industry is going to see during the remainder of the 2020s cycle is the move to the next realm of metro areas. Investors who initially looked at the Atlanta metro moved to Charlotte and Raleigh, North Carolina, and Nashville, Tennessee. Now that those markets have gotten more expensive, they’ll start to look at Charleston, Asheville, and Knoxville, Tennessee, next.
Gainesville, Georgia
Whitaker finished with Gainesville, which is on Lake Lanier northeast of Atlanta, on his list of small markets to watch.
“To me, Gainesville fits the thesis of corridor growth. At some point, the bigger metro areas swallow up what was once its own metro area. While it’s an hour-plus from downtown Atlanta, you’re not that far from some of those northern employment nodes,” he noted.
Tallahassee, Florida
Clark added Tallahassee, another college town and Florida’s capital, to his list of smaller markets.
“It was a really fantastic area of growth in the past year, and a huge slowdown in supply is coming in 2025 and 2026,” he said. “You can get appreciation before the next building boom. The next three or four years are going to be really strong for Tallahassee.”
Santa Rosa, California
Clark’s final pick was Santa Rose, just north of the Bay Area in Sonoma County.
“I felt nervous about putting a Northern California metro in here, but it has strong rent growth compared to the rest of the region. It’s got the Bay Area commuters who are now remote, the beautiful wine country, and a huge drop-off in completions. Plus, there were hardly any starts last year,” he noted.
