New Haven-Fairfield County is expected to outpace the national multifamily sector in various categories in 2025. One of those is notably vacancy, which fell by 70 basis points between late 2024 compared with 2019 levels, according to a market report from Institutional Property Advisors.
While vacancy is projected to tick up by 10 basis points to five percent this year, the level is expected to be 110 basis points behind the 6.1 percent national average.
IPA attributes the strong demand for multifamily in New Haven-Fairfield County to the convenience of transit access in the area.
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"The majority of post-pandemic openings were within a few miles of Interstate 95, Route 1 or the Metro-North rail line," IPA explained.
"While ridership on the line has yet to fully return to pre-pandemic levels, it is still among the country’s busiest commuter rails. This trend reflects the importance of access to New York City, as well as the appeal of developed local town centers."
In 2024, Waterbury, Meriden and Hamden stood out with vacancy rates staying under three percent in each neighborhood. Additionally, IPA noted that those areas experienced rents that grew at a faster pace than anywhere else in the market.
For 2025, IPA is forecasting that New Haven-Fairfield County as a whole will experience rent growth of three percent to reach $3,301 per month.
Some other projections in 2025 from IPA include the county's employment increasing by 0.6 percent and construction rising by 1.8 percent, which is below the 2.1 percent national estimate.
As far as multifamily investment goes in the area, the CRE firm noted that property trades averaged cap rates that were almost seven percent in 2024, which was the highest level seen since 2014. That's a trend that could continue into 2025.
"Investor expectations aligning with this benchmark may facilitate more transactions this year," IPA predicted.
"Buyers focused on post-2010-built properties, whose yields trend lower, may find more options in Norwalk, New Haven proper or Downtown Stamford, where construction has been prevalent."
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
