In the last few years, the multifamily housing market has expanded exponentially. Since the pandemic, multifamily construction has been on the rise. This is partly due to factors such as recent rental growth, high demand and lease renewals, migration, job growth, affordability and more.
While large metro areas across the U.S. attract the most construction activity, the Sunbelt region is undergoing an intensity of construction unlike ever before. Below, we’ve detailed a few of the essential factors of these metro areas’ massive apartment construction activity.
Migration
Metro areas in the Sunbelt experienced incredible net domestic migration during the first year of the pandemic. Between July 2019 and July 2020, Phoenix, Arizona, experienced a net domestic migration of nearly 89,000 people, followed by Austin, Texas, with a little over 53,000, and then Raleigh, North Carolina, with more than 21,000 people.
Since the great migration, plenty of businesses have boomed and metro cities in the Sunbelt have nearly recovered most of their lost employment. Remote and work-from-home opportunities have made it especially easy for workers to stay in these ideal markets and have further propelled the demand for these market spaces.
Strong Job Growth
Cities like Raleigh, Austin, and Nashville, Tennessee, are just some of the prime targets for developers. Overall, Sunbelt states experienced a strong job recovery with relatively affordable housing costs. Such a strong market draws employers and workers alike.
In Charlotte, North Carolina, the city projects a 13.2 percent increase in jobs from 2016 to 2026. The job market in the Queen City benefited from positive migration trends as several fintech companies, logistics and distribution firms expanded in the metro. Other target sectors such as advanced manufacturing, healthcare, and headquarters for Fortune 500 and 1000 companies also shifted to Charlotte and strengthened the job market.
Affordability
The cost of living in the Sunbelt states is relatively cheap compared to other regions. For example, Charlotte’s cost of living is about $50,000 a year to maintain a good quality of life. When compared to the National Average Cost of Living Index (100), cities like Nashville (95.4), Charleston (99.8), Orlando (99.3) and Charlotte (94.8) are below average, and citizens can often afford more square footage of apartment space when compared to other regions.
These fast-growing cities also hold the lowest tax rates in the country and overall low cost of living (groceries, gas).
Construction activity is at an all-time high in the Sunbelt states, especially in multifamily market spaces. At Honour Consulting, we know that robust population and economic growth create a prime market for construction firms and contractors. With substantial development underway, let us be the consulting and recruiting firm to build your company. Reach out to us today.
