BiggerPockets Daily Is the Multifamily Market Steaming Toward Failure?
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Feb 3, 2025 Dive into the booming multifamily housing market, especially in the Sun Belt, where construction is on the rise. Discover expert insights on vacancy rates and the evolving demands of tenants. Learn essential tips for investors eyeing multi-unit properties in 2025, including how to navigate interest rate changes and oversupply. Plus, get strategies for negotiating prices and understanding the impact of rising insurance and construction costs on your investment returns.
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Multifamily Construction Boom
- Multifamily construction boomed in 2024, especially in the Sun Belt.
- This follows significant growth in 2023 and a five-year period of high construction activity.
Regional Construction Trends
- The Sun Belt led multifamily construction, with Austin and Phoenix seeing massive increases.
- Surprisingly, Philadelphia and Minneapolis also added significant units while maintaining vacancy rates near the national average.
Austin's Vacancy Issue
- Austin, Texas, experienced a significant surge in new multifamily units, but it also saw vacancy rates rise above 15%.
- Matt Rosenthal described Austin as "the worst apartment market in the country."