Multi-family properties have traditionally seen a strong and steady growth rate – particularly in the years 2016-2019. Unemployment stayed low and the occupancy percentage was high – making multi-family occupancies a secure investment.
2020 and the Covid-19 pandemic saw a shift in these numbers, particularly due to the sharp increase in unemployment. There’s no mistaking that this has had an impact on real estate, with some types of properties doing better than others.
The Future of Multi-Family Investment Properties
A multi-family investment property falls under what we call the ‘speedbump’ category. This means that while it has seen a downturn over the course of the pandemic, it is due to recover.
2021 is due to see this recovery start to happen, even if only slightly. For the most part, the economic outlook is flat, however employment numbers are bound to bounce back and this can already be seen in multiple areas across the country. By the end of the year, going into 2022, we should begin to see a rebound in growth. This makes multi-family real estate development a great investment prospect now, as rent prices are set to increase, and occupancy levels rise to pre-pandemic numbers.
Catalyst’s Top Cities: Our Predictions
Previously, Catalyst Capital Partners have invested in both Charlotte and Raleigh. Due to the optimistic markets for post-Covid investment, we hope to expand our footprint into the Nashville area. These three markets are places we believe make good investment prospects for multi-family real estate.
Despite some contraction post-Covid, Charlotte saw a 2.0% year-over-year growth last year. This area has a diversified economy which helps to keep the market healthy. Charlotte is still one of the fastest growing cities in the county with net migration nearly 8,000 in 2019, and the job market continues to increase. Covid has only been a blip on the radar for Charlotte, and it is already well on the way to recovery. In fact, Charlotte’s multifamily market was one of the top performers in the country last year, despite Covid 19.
The average rent in Raleigh for 2020 was $1.22 per square foot per month, growing 1.4% year over year. This is an area that has definitely weathered the worst of the Covid storm and is prime for investments. There’s great economic diversity in this area, and there was a great resurgence of demand in the last quarter of 2020.
This is a new venture that we here at Catalyst are very excited about. The population of Nashville is growing, and while 2020 did see rent fall, the previous three years saw an increase which is promising for recovery. Nashville is already beginning to bounce back and with predicted job growth to be 5.0% in 2021, demand for multi-family developments is sure to be high.
Multi-Family Development In NC & TN
When it comes to multi-family developments in Charlotte, Raleigh & Nashville, we’re set to see the returned positive growth expected in 2022 and an improvement in economic stability overall.
For more information about the state of multi-family developments, acquisition or to get in touch with us, contact the professionals at Catalyst Capital Partners today.