The US apartment market with the most aggressive development can be found in the Deep South city of Huntsville, Ala., according to RealPage, and it has claimed that title since 2022. In the year-ending 1st quarter 2024, roughly 5,900 units delivered, expanding inventory a phenomenal 15.9%. And there are another 9,895 units in the construction pipeline, with 6,900 of those units projected to complete by the end of Q1 2025, pushing inventory growth another 16.2%. “That ratio ranks as the #1 rate for under construction inventory growth across the country, outpacing big markets like Dallas, Houston and Atlanta,” RealPage’s Carissa Brown writes. Huntsville isn’t expected to see a peak in inventory growth until around the end of 2024, she adds.
All together it has about 42,900 existing units, comparatively smaller than fellow Alabama markets Birmingham, which has 81,145 existing units, and Mobile/Daphne with 43,559 units.
The growth, though, has had the expected effect on occupancy and vacancy rates. In April 2024, Huntsville’s occupancy rate was 93.7%, about 270 basis points below the five-year average, 120 basis points behind Huntsville’s 10-year average and roughly 40 bps below the US norm of 94.2%.
Still RealPage concludes that Huntsville’s demand is relatively in balance with supply, with roughly 5,110 units absorbed in the year-ending April, about even with deliveries of 5,885 units. However, landlords cut effective asking rents 3.3% year-over-year in April 2024, the 11th consecutive month for reductions. That rate fell below the five-year monthly average of 6%.
Solid job and population growth are the drivers behind the market’s growth. In the year-ending April 2024, Huntsville added 8,200 jobs, expanding the employment base by 3%, which is more than double the US average of 1.3%. Also, population in the metro area has reached 527,254, up from 494,706 in 2020, a 6.6% increase, according to 2023 estimates from the US Census Bureau.