John Burns Real Estate Consulting predicts apartment demand will bounce back, but when that will happen depends greatly on the market. John Burns broke down its apartment forecasts into four categories: Boomburbs, Braintowns, Downtowns, and Dependables. It will be all sunshine for the Boomburbs this year, which are identified as suburban rental markets. Examples include Austin, Tampa, Charleston, and Phoenix. This market greatly benefitted from the migration out of cities. Rental growth may return to normal next year, but as the vaccines roll out and the pandemic gets under control, rents in these areas may dip 1% to 2%.
Suburban markets have captured most of the positive headlines in 2020, attracting investment and development capital. We are still very bullish on locations close to jobs, retail, and entertainment and properties that provide an “affordable alternative” to urban apartments.
2021/2022 Outlook: Mostly Sunny in 2021
40% of markets fall into this category.
Examples: Austin, Tampa, Charleston, Indianapolis, Myrtle Beach, Nashville, Phoenix
2. Braintowns (College Towns): These markets depend on students and were heavily impacted in 2020 (5% to 10% rent declines). We see demand and rents continuing to soften in the first half of 2021 with an improvement this Fall as more students return to campus. Properties located close to campus will benefit. More students will likely desire to live off-campus, supporting demand for apartments.
2021/2022 Outlook: Partly Sunny by 2021
5% of markets fall into this category.
Examples: Ann Arbor, Boulder, Charlottesville, VA, Madison
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