Last month, Freddie Mac predicted 2019 would be a banner year for multifamily. That trend is expected to continue in 2020, particularly in Charleston, South Carolina; Colorado Springs, Colorado; Salt Lake City, Utah; Raleigh, North Carolina; and Louisville, Kentucky; according to a recent study by Yardi Matrix.
The study estimated that almost 300,000 new units will be completed by the end of the year, and predicted that the number would be relatively close in 2020. When looking at cities with anticipated multifamily developments, the report stuck to metros in the second and third tier markets with population under 1.5 million.
That said, the five cities in this category that will likely see largest increase in units include Charleston, Colorado Springs, Salt Lake City, Raleigh and Louisville.
The report ranked Charleston highest in terms of expansion of apartments inventory. With more than 3,600 units expected to be delivered by the end of 2019, and just under that same number in 2020, the city’s multifamily growth should hold steady.
Runner up in the report is Colorado Springs. Yardi cited a rent growth rate above 5%, as one of the indicators that this city is only going to see more development in the coming year. Exactly 2,093 units are anticipated to be completed this year, with the number only slightly dropping to 2,065.
Salt Lake City is anticipated to add 4,246 units this year, accounting for 4.3% of its total inventory. Like previously mentioned cities, the forecasted completion number drops in 2020, but not by much, as the Utah capital expects to add 4,189 units next year, according to Yardi.
Adding more than 5,800 units by the end of the year, Yardi anticipates that Raleigh will tack on another 5,723 in 2020. And it is no surprise that development will continue at a rapid pace. Earlier this summer, the North Carolina metro was listed as having one of the top 10 fastest growing cities.
Louisville is another one to watch, with 2019 deliveries accounting for 3.6% of its total stock. By the end of this year, the city is expected to add a total of 2,781 units. Next year’s forecasted deliveries are anticipated to barely drop to 3.5%, with 2,744 completed units.