The rebound of the leisure and hospitality sector is shifting the dynamic between multifamily’s main property segments, reversing the lead in rent development and occupancy from the Lifestyle segment to working-class Renter-by-Necessity apartments. Overall, Nashville rents rose 1.3% on a trailing three-month basis through July, to $1,676. Meanwhile, the occupancy rate in stabilized properties stood at 96.2% in June.

Nashville unemployment clocked in at 3.5% in June, according to data from the Bureau of Labor Statistics, slightly trailing the state (3.4%), but outperforming the U.S. (3.6%). The metro gained 70,200 jobs in the 12 months ending in May, up 6.3%, ahead of the 4.7% U.S. rate. Leisure and hospitality led gains (20,200 jobs), followed closely by Nashville’s largest sectors—professional and business services (14,400 jobs) and trade, transportation and utilities (11,600 jobs). Amazon and Oracle are among the companies that announced expansions in the metro.

Developers delivered 2,670 units in 2022 through July, which represented a decrease from the volume recorded during the same period last year. The construction pipeline remained robust, however, with 20,070 units underway. Investment volume surpassed $2.2 billion through July, outperforming the figure recorded in the same time frame of 2021. The price per unit was up by 21.4% year-over-year, to $240,218, leading the $216,893 U.S. average.

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Knoxville’s multifamily sector is having a stellar year, with new records across market fundamentals. Rent development on a three-month (T3) basis was 2.0% as of July, double the national rate of improvement. The average overall rate was $1,451, still well behind the national figure and trailing nearby Nashville. Meanwhile, the average occupancy rate in stabilized properties was one of the highest in the nation, at 98.2% as of June, despite consistently solid development activity in the rental sector.

Employment growth in the 12 months ending in May was consistent, but lower than the national trend. Knoxville added 18,800 jobs, up 4.2% and 40 basis points below the U.S. rate. However, the local economy is already past its pre-pandemic job total, so improvement is arguably very strong. Trade, transportation and utilities is the local economy’s cornerstone, accounting for roughly onefifth of all jobs in the sector. With a new Amazon delivery facility replacing the Knoxville Center Mall, improvement will continue.

Investment activity in Knoxville is already seeing its best year this decade, with $429 million in sales through the first seven months of 2022, while the average per-unit price crossed the $200,000 mark for the first time on record. Knoxville added 1,076 units this year through July, already an annual decade high. The metro had another 1,215 units under construction, pointing to continued deliveries.

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Phoenix’s economy has been in expansion mode since late last year, when it recovered all jobs lost during the pandemic. Its prospects are mostly dependent on national and global events. Expectedly, the multifamily market reacted to the positive economic performance with robust fundamentals, especially on the supply and investment scenes, delivering all-time high figures. Consequences of the recent substantial supply volume reverberated in rent growth—moderating since the start of the year and up just 0.3% on a T3 basis through July, to $1,690—and pushed occupancy down 110 basis points in the 12 months ending in June, to 95.3%.

Phoenix unemployment stood at 3.4% in June, according to preliminary data from the Bureau of Labor Statistics, leading the U.S. (3.6%) and trailing the state (3.3%). The job market added 81,000 positions, up 4.0% in the 12 months ending in May, with gains led by the leisure and hospitality segment (23,300 jobs). The financial activities and government sectors lost 2,800 jobs combined, but overall, the metro had 15,000 more office-using positions than it did pre-pandemic.

Developers delivered 7,701 units in 2022 through July and had another 34,700 units under construction. Meanwhile, investment activity exceeded $7.5 billion, above the volume recorded during the same period last year, with the price per unit surpassing the $300,000 mark following a 48% annual increase.

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New York City’s largest borough recorded mixed results during the first seven months of the year, but overall demand for multifamily remains elevated. Rates in Queens grew 0.2% on a trailing three-month (T3) basis through July, to $2,820. Rent development in the borough was 80 basis points below the U.S. figure, but the overall rate remained far above the national average ($1,717). Meanwhile, occupancy in Queens increased by 10 basis points year-over-year, to 98.3%, well above the national figure (96.0%).

The unemployment rate in New York City reached 6.1% as of June, according to preliminary data from the Bureau of Labor Statistics. Over the 12 months ending in May, NYC added 403,000 jobs, a 5.8% expansion, registering above the national rate by 110 basis points. The city’s largest sectors, education and health services (up 3.8%), along with professional and business services (up 7.2%) recorded significant gains. Leisure and hospitality was still the sector with the most jobs recovered, at 139,200 (up 29.0%), while construction was the only sector that lost jobs—down 3,700 positions, or 1.4%.

Development activity remained elevated in Queens, with 8,798 units under construction as of July. A total of 2,204 units were completed during the first seven months of the year, representing a 2.1% expansion of stock. The borough had another 23,700 units in the planning and permitting stages.

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The Twin Cities multifamily market remains an attractive option for investors, even though rent performance is moderating. Rates increased only 0.3% on a trailing three-month basis through July, to $1,461, below the national average, which grew by 1.0% and hit $1,717. Following record growth in 2021, rents are decelerating as economic uncertainty sets in further.

As of June, Minneapolis-St. Paul’s unemployment rate stood at 2.2%, significantly below the 3.5% national figure. Expanding by 2.9% in the 12 months ending in May, employment growth was led by leisure and hospitality, followed by manufacturing. The two sectors accounted for more than half of the 58,900 positions added. The public sector was the only one that lost jobs, contracting by 200 positions. With the metro’s stagnant population growth, employers are scrambling to fill openings, a trend impacting the great majority of U.S. metro areas.

Deliveries started to soften this year, with only 4,188 units coming online in the first seven months. St. Paul passed the most stringent rent control law in late 2021, which almost generated a standstill in new development. Developers broke ground on only 257 units, compared to 5,207 last year through July. Meanwhile, transaction activity continued unabated, with sales volume hitting $923 million. Yardi Matrix expects rents to improve by 4.6% this year, which would be the slowest rate of improvement among major metros.

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After a banner 2021, the Jacksonville multifamily market shifted down a gear, to more sustainable levels of expansion. Rents were up 0.4% on a trailing three-month basis as of July, to $1,525, below the 1.0% U.S. rate. Still, that brought year-over-year growth to 13.5%, above the 12.6% national figure. Meanwhile, occupancy dropped 110 basis points as of June, to 95.2%, demonstrating another sign of cooling growth.

Metro Jacksonville gained 25,900 jobs in the 12 months ending in May. That marked a 4.8% rise, 10 basis points above the national average. Professional and business services brought the most positions—13,700 jobs, for an 11.9% hike—again underpinning Florida’s status as a strong magnet for office-using employees. Unemployment reached 2.9% as of June, relatively in line with other metros in the state and below the 3.6% U.S. figure.

A total of 1,590 apartments came online in the first seven months of the year, with an additional 9,365 units under construction as of July. Yardi Matrix expects 3,788 units to come online through the end of 2022, which would mark the highest level of deliveries since 2019. Following a record $2.6 billion in multifamily deals last year, transaction volume reached $1 billion year-to-date through July. The price per unit clocked in at $138,737, close to the figure recorded during the same time frame in 2021 but substantially below the $216,893 U.S. average.

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Powered by a recovering economy, Denver’s multifamily market saw a steady performance in 2022, with sustained rent growth, substantial investment activity and consistently solid construction across the metro. Demand kept up with supply additions, with rents rising 1.2% on a trailing three-month basis through July, to $1,941, but the occupancy rate in stabilized properties was slightly impacted, declining 30 basis points in the 12 months ending in June, to 95.4%.

Denver unemployment stood at 3.2%, faring better than both the U.S. (3.6%) and the state (3.4%), but the market is still nowhere near pre-pandemic levels. Even so, the metro recovered nearly all jobs lost during the health crisis, with the employment market expanding 5.3% in the 12 months ending in May, adding 92,500 jobs. Professional and business services—Denver’s largest sector—led growth with 29,700 positions. Leisure and hospitality continued its rebound with 26,600 new jobs. Moreover, Denver International Airport’s passenger volume in the first half of 2022 was just 1.6% below that of the same period in 2019.

Development activity moderated slightly, but still posted consistent numbers: 4,424 units delivered through July and 29,000 units were underway. Meanwhile, sales volume reached nearly $2.9 billion, trailing the figure registered during the same period last year. The price per unit increased by 9.4% on an annual basis

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The economic recovery in Columbus is gaining steam due to healthy demographics, a competitive cost of doing business and a lower cost of living compared to coastal markets. Although year-over-year rent growth was on par with the national average—12.6% as of July—the average rate ($1,237) remained well below the U.S. figure ($1,717). On a trailing three-month basis, rents increased by 1.3%, 30 basis points above the U.S. rate.

The Ohio capital’s employment market is steadily rebounding, with 28,300 jobs added in the 12 months ending in May, up 2.4%. The trade, transportation and utilities sector led gains with 17,000 jobs, followed by leisure and hospitality with 10,400 positions. But the construction sector is rapidly catching up, particularly as Intel has already posted hundreds of job openings for the construction of its $20 billion semiconductor facility in New Albany. Vitamin and supplement manufacturer Pharmavite intends to spend $200 million on a new 250,000-square-foot plant in New Albany as well, while Amazon is building its third data center in Hilliard.

While investment activity remained elevated—with more than $552 million in multifamily assets changing hands in 2022 through July, compared to just $454 million over the same interval last year—the metro’s pipeline slowed down. Only 1,783 units across 12 projects came online, half the deliveries recorded last year through the same period.

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Chicago’s rental market continued on a solid trajectory, but relative to other gateway markets, it is still playing catch-up. Rents in the metro advanced 1.1% on a trailing three-month (T3) basis through July, to $1,814, exceeding the U.S. rate by 10 basis points after lagging for the first half of the year. On a year-over-year basis, rents were up 9.6%, 300 basis points behind the U.S. figure and behind most other major metros.

The metro’s unemployment rate reached 4.8% as of June, according to preliminary data from the Bureau of Labor Statistics, having increased 70 basis points from its lowest point in April (4.1%). Still, the metro is faring better compared to 2021—over the 12 months ending in May, Chicago added 212,100 jobs, representing a 4.9% increase. Chicago launched its first citywide plan in over 50 years. Dubbed “We Will Chicago,” the 10-year framework aims to reduce the city’s social and economic inequities. Following policy discussions, a public feedback process and an estimated $4 million to create it, the plan will be implemented in 2023.

Multifamily transactions amounted to $1.4 billion for the first seven months of 2022, down 14% year-over-year, after 2021 saw a record $3.9 billion in sales. Development activity stayed strong, as Chicago had 16,196 units under construction, more than 75% of which target Lifestyle renters

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Halfway through 2022, Philadelphia’s multifamily market maintained its vigor despite rising uncertainty regarding the economy. Strong demand kept up with substantial deliveries and the occupancy rate in stabilized properties remained flat at 96.7% in May, with core submarkets beginning to regain popularity among renters. Meanwhile, the average rent rose 11.4% year-over-year through June, to $1,695, still trailing the $1,706 U.S. figure.

Philadelphia’s employment market expanded 4.3%, or 113,800 jobs, in the 12 months ending in May, 40 basis points behind the U.S. rate. Leisure and hospitality (38,100 jobs), trade, transportation and utilities (21,400 jobs) and professional and business services (20,100 jobs) led growth, and all sectors continued to gain positions. Even though the metro has been slow to recover jobs lost during the peak of the health crisis, the unemployment rate improved to pre-pandemic levels, hovering in the lower half of the 4.0% band since the start of the year, but lagging behind the 3.6% U.S. rate.

Developers delivered 1,763 units during the first half of the year and had 14,891 units under construction. Meanwhile, transaction volume rose to nearly $1.2 billion through June, well above the figure recorded during the same interval last year. Still, most of the deals occurred during the first quarter, and further moderation is anticipated. Per-unit prices rose 35.2% in 2022 compared to 2021.

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