Last year, the Sun Belt seemed to be multifamily royalty. Businesses moved to the area, searching for cheaper and less regulated places. People follow the jobs. That meant a need for multifamily housing.

But, at least in REITs, there's been a turnaround. "Coastal-focused apartment REITs outperformed Sun Belt heavy peers by 17 percentage points in the first half of '23, on the heels of substantial underperformance for the better part of the last three years," wrote Green Street analysts John Pawlowski, Alan Peterson, and Robyn Luu, in a new report.

What has brought REITs focused on coastal multifamily back around is a combination of cheaper valuations, coming off peak pricing, and a convergence in operating fundamentals across regions. For several years, there was significant higher performance in rent growth in the Sun Belt than in older coastal metro areas, boosting the former's relative fundamentals.