Ranked: The 30 metros where apartment demand has rebounded the fastest

Ranked: The 30 metros where apartment demand has rebounded the fastest

The third quarter saw record-levels of apartment demand in the U.S., a much-welcomed comeback for metro areas that’ve been seismically disrupted by the pandemic.

The Business Journals analyzed RealPage Inc. data from the first quarter of 2020 to the third quarter of 2021 to see where apartment demand has recovered the fastest since right before the pandemic hit home.

The analysis ranked 30 of the approximately 50 metropolitan statistical areas included in RealPage’s data to determine which areas have seen the biggest surge in apartment demand since early 2020. It’s similar to our recent analysis of markets where rents grew the fastest, but the results are quite different.

Some of the hottest real estate markets in the country, such as the Phoenix MSA, aren’t included in this top 30 list. That’s because demand in those markets never dramatically fell off, as it did in other places. For some metros topping the list, growth never drastically fell off but accelerated much faster than other areas of the country.

A lot also hinges on the for-sale housing markets of a specific MSA. A spike in apartment demand can be attributed to several forces but extremely limited for-sale inventory and high demand has certainly helped bolster the apartment markets where would-be homebuyers are flocking.

The third quarter of 2021 saw the biggest quarterly product absorption figure seen in records that go back to the early 1990s, according to RealPage.

The data also shows which markets saw the steepest dropoffs in apartment demand during the height of the pandemic — Q2, Q3 and Q4 2020. Three of the country’s largest MSAs — New York, San Francisco and Los Angeles — saw drops of 12,967, 7,004 and 5,975 units in the third quarter of 2020 alone.

Q3 2021 was the first quarter since the pandemic that all 50 MSAs saw positive growth in occupied apartments. New York, which had posted quarterly declines since Q2 2020, saw the biggest number of units newly occupied, with 11,169. That was followed by San Francisco, with 9,319 units.

The numbers suggest the big gateway markets that posted the biggest pandemic losses are coming back — roaring back, in the most recent quarter. Perhaps the rebound in apartment demand will have ripple effects on the other commercial real estate sectors in those markets.