The top five cities leading the way in the multifamily sector for 2018 should be of no surprise to investors. All of them were on the top 10 list from last year, and the number one and two spots were reversed. With confidence in the job market in all these areas, the need for Class A apartments has greatly increased.
Ranked in second place last year, Seattle-Tacoma has taken the top spot in the multifamily market for 2018. New residents have continued to flock to the area because of the thriving tech sector and availability of jobs. Housing prices are at a record high, which encourages many residents to consider rentals instead.
The demand for high quality, luxury rentals in Seattle is at an all-time high. The vacancy rate is decreasing, and rents are rising to meet the demand. Investors are confident this trend will continue throughout the year.
Slipping down to the number 2 spot in 2018, Los Angeles was narrowly beat by Seattle. The demand for multifamily units is still at an all-time high, which is why many investors are slated to build new units throughout the city. The desire for luxury living ensures that landlords are able to keep rental prices on the increase.
Moving up one spot, Minneapolis-St. Paul ranked number 3 in the multifamily sector for this year. This spot was previously held by Boston, which dropped down three slots. Job creation and employment remain constant in the city, which keeps rental units in demand. The multifamily housing market in the city is strong and reliable for investors.
San Diego was able to move up five positions from 2017, ending up in the number 4 spot for 2018. A growing millennial population and high housing prices have increased the demand for multifamily units. Rental rates are increasing and vacancies are low. Investors are looking to take advantage of this market by building new units throughout the year.
Ranked at number 5, Portland continues to have a high demand for multifamily living. The city moved up a single position from last year, and investors are feeling confident that the market will stay strong for the remainder of 2018. However, the growth rate is expected to decrease from previous years. The market may change in the near future as home prices decrease and more people move to the outskirts of town.
Even though the top five cities remained almost unchanged, there were some surprises on the list. Sacramento had the largest increase, moving from 20 to number 8. Orlando moved up 10 places from the 27th spot last year to end up number 17 overall for 2018.
The general outlook for apartments in 2018 is still very high. With an influx in new jobs and more families looking for housing, there is a huge demand for all types of rentals. Larger cities, where incomes tend to be higher, insist on more Class A apartments, while Class B and C apartments remain in demand by the working-class community.