Apartment Inventory Growth in Suburban Sun Belt Markets Above 10%

Bustling apartment construction activity drove inventory in 15 of the country’s 50 largest markets above 10% in the first quarter of this year. The region that reflected the trend most was the Sun Belt, due to migration in and population soaring since the pandemic began, according to RealPage Market Analytics.

Texas and in particular its Dallas/Fort Worth area showed significant supply volume and helped it earn the title in the report of “nation’s construction powerhouse.” More than 74,000 units are in the pipeline there, which represent an all-time high. Four areas are where inventory is growing the most. The south suburb of Burleson/Johnson County in Fort Wayne won the top spot with an all-time high increase of 20.1%. It was followed by two other Fort Worth submarkets: North Fort Worth/Keller at 13.4% and South Arlington/Mansfield at 12.4%. The other Dallas submarket making the list was Frisco, which saw growth of 14.9%.

Though the Dallas/Fort Worth area had shown softening apartment demand, two of its northern suburban submarkets of Fort Worth/Keller and Frisco were leaders in absorption in the past year, which helped compensate for weakness in other nearby submarkets.  

Another Texas area of submarkets experiencing growth is in the Austin area where two submarkets made the list. East Austin gained 13.3%, thanks to its walkability to bars and restaurants. The northern suburb of Round Rock/Georgetown was 12% higher, mainly due to being a tech center and employment hub. These two submarkets also continued to post positive absorption, though annual demand in Austin as a whole has slowed in the year’s first quarter.

Other Southern cities that ranked high and made the top 15 include Jacksonville’s Mandarin submarket’s apartment base, which climbed 19.9% and ranked second nationwide. The area is named for the Mandarin orange, sitting on the St. Johns River, with ancient oak trees draped with moss and was described as a tropical paradise by one author. Of late, the area also reflected absorption, and is expected to continue with high supply volumes in the near term.

Three Phoenix submarkets saw their inventory grow by more than 10% in the past year, though the city has been one of the fastest growing apartment markets of the last 10 years. According to another RealPage Analytics article from March 20, 2023, 46,800 units were underway at the end of 2022, and inventory will increase by another 12% in the near term. Among the submarkets seeing a boom are Central Phoenix, which logged the biggest increase at 15.9%, while Gilbert and Avondale/Goodyear/West Glendale posted increases of about 11% to 12%. Gilbert logged impressive absorption.

Among the other submarkets that made the top inventory list are Nashville, Washington, D.C., Tampa, Houston and Atlanta.