A recent study by HouseCanary examined the top 100 MSAs (metropolitan statistical areas) in the U.S. by population to determine which showed the highest year-over-year price growth for apartments, condos and single-family homes.
An increase in population and jobs is a strong indicator of emerging markets where there could be potential for investors in multifamily housing as well as commercial sectors.
All three of the areas in the HouseCanary study exhibited increasing value in various sections of the country, correlating with U.S. Census migration data.
The study showed that areas with robust population growth exhibited particularly strong price growth for multifamily properties.
Here is HouseCanary’s ranking of the Top 10 Apartment Markets:
The Bottom 10 Apartment Markets, in terms of price growth, were:
Only one major apartment market recorded a drop in prices year-over-year: Virginia Beach-Norfolk-Newport News, Va. Based on the findings, multifamily is attractive for investment in the West and Florida (where population is growing) but not so much along the East Coast, which is experiencing migration away from major metro areas.
Of course, we always recommend deep analysis of markets when you are considering new investments in an area, or relocation or expansion of commercial properties. Population growth is just one of many factors to be considered.
As HouseCanary notes: “Most of these metros have recovered at least partially from the Great Recession, and many of them have positive job growth, but there are other metros with better recovery and more robust job growth that aren’t seeing equivalent levels of positive price growth in single-family homes, condos, and apartments. … Condos and apartments tend to increase in price more than single-family homes in areas where the population is growing, but they’re not always a safe bet — condo and apartment prices can decline year-over-year in markets where population growth is slow or markets where more people are migrating out than are moving in.”
To read more from HouseCanary about the study, click here.