What are the markets, nationwide, that are the hottest for new multifamily development? We took a look at recent research and numbers and share which markets might be seeing a boom in building and new multifamily inventory within the next year and beyond, in today’s BAM blog…

According to stats published in a recent National Real Estate Investor (NREI) online piece, although many of the following markets had previously announced they’d be expecting delivery of new units, these areas aren’t yet saturated and are still in high-demand. We listed the top five hottest cities for multifamily construction:

  1. Miami, FL: Using CoStar data, Miami had over 16,000 units under construction in the third quarter of 2018. Another research firm quoted by NREI, MPF, noted 9,656 more units under development in the Miami/Miami Beach/ Kendall Beach metro area. Thanks in large part to continued immigration, Miami’s need for multifamily units hasn’t slowed and construction continues at a fierce pace.
  1. Salt Lake City, Utah: According to research, thanks to a business-friendly city and lower cost of living, this city’s need for multifamily housing is only growing. In the third quarter of this year, Salt Lake City had just over 6,500 units in some phase of development. Research company MFP notes that 3,237new units were under construction in Salt Lake City metro areas.
  1. Nashville, TN: This city is definitely seeing growth – both in population and in the need for new multifamily housing. According to the NREI data, good schools, lower taxes, and new jobs are continuing to draw residents to this southern city. There were 10,220 units in some phase of construction during 2018’s third quarter, according to the CoStar numbers. There were also 5,329 units being developed in Nashville’s metro areas, according to MFP.
  1. Boston, MA: This big city out east is seeing a real need for multifamily units, and has plenty planned or under development according to the numbers. Boston had 17,707 units in some phase of construction in 2018’s third quarter. Yet according to the data, very few planned apartments had actually broken ground.
  1. Jacksonville, FL: This is the second city in Florida to make the top five. According to the numbers provided by NREI, developers had 6,906 units under development in the third quarter of 2018. MFP cites close to 4,000 units under construction in the metro area.

Other cities to score close to the top for booming multifamily construction markets are Seattle, Charlotte, Denver, and Austin. As the demand for multifamily housing continues, the inventory will need to be delivered to keep pace with renters’ housing needs. As we’ve noted in the past, much of the current inventory being delivered in many metro areas is Class A or luxury units, which makes sense from a development standpoint, but which also excludes a large segment of the rental demographic. These areas will still need to address their need for more workforce housing to fulfill those who are necessity-renters and on a tighter monthly budget than those able to afford Class A assets.