As an experienced multifamily investor, I’ve seen the market go through its ups and downs. But 2023 is shaping up to be a banner year for those looking to invest in this thriving asset class. Multifamily properties are experiencing high demand, double-digit rent increases, and historically low vacancy rates across the country.
In this comprehensive guide, I’ll be sharing my insights on the top 10 cities for multifamily investing in 2023, with data sourced from the Emerging Trends in Real Estate 2023 report by PwC and Crexi platform. Whether you’re a seasoned investor or just starting out, this guide will equip you with the knowledge to make informed decisions in the booming multifamily market.
1. New York City
Population: ~9 million
Median Rent for 2-bedroom Units: $4,450
Occupancy Rate: 79.1%
Year-over-Year Rent Growth: 27%
New York City, often referred to as the melting pot of cultures, is a thriving metropolis with a high demand for housing. The city’s five boroughs – the Bronx, Brooklyn, Manhattan, Queens, and Staten Island – are home to nearly 9 million people. As a global financial center, NYC offers numerous opportunities for those looking to invest in multifamily properties.
With 67% of households in the Big Apple renting rather than owning, there’s a consistent demand for rental units. On the Crexi platform, asking prices for NYC multifamily properties rose nearly 13% in 2022 compared to the previous year. Additionally, average occupancy levels increased to 79.1% in 2022 from 74% in 2021, signaling a strong market outlook.
2. Raleigh/Durham
Population: ~1.4 million (combined)
Median Rent for 2-bedroom Units: $1,500
Occupancy Rate: 50% (approx.)
Year-over-Year Rent Growth: N/A
Raleigh, the capital of North Carolina, and Durham, one of the state’s largest cities, together form a research triangle. The area is home to three major universities – Duke University, the University of North Carolina at Chapel Hill, and North Carolina State University. This has attracted numerous technology and life science companies, fueling strong population and employment growth.
With a 2.3% yearly population increase and a 2.6% employment growth rate, Raleigh/Durham offers ample opportunities for multifamily investors. The median rent for multifamily units in the area is over $1,500 per month, and nearly 50% of housing units are renter-occupied. Crexi data reveals that Raleigh multifamily properties have transacted at a median $221 per square foot closing price, up from $193 in 2021.
3. Nashville
Population: ~1.9 million (metro area)
Median Rent for 2-bedroom Units: $1,845
Occupancy Rate: 84%
Year-over-Year Rent Growth: 9%
Nashville, the capital of Tennessee, is one of the fastest-growing cities in the US. The city is renowned for its music and entertainment industry, as well as its thriving healthcare and education sectors. With a population and employment growth rate of nearly 2% year over year, Nashville’s multifamily market is experiencing increased demand.
Over 40% of Nashville housing units are occupied by renters, and annual rents have grown 9% year over year. Crexi data shows that the occupancy rate of new listings added in 2022 jumped to over 84
%. The platform also revealed a median asking price of $209 per square foot for multifamily properties, up from $191 in 2021. Nashville’s robust job market and affordable living costs make it an attractive destination for multifamily investors.
4. Austin
Population: ~2.3 million (metro area)
Median Rent for 2-bedroom Units: $1,780
Occupancy Rate: 88.5%
Year-over-Year Rent Growth: 16.5%
Austin, the capital of Texas, is experiencing rapid population and job growth, driven by its status as a leading tech hub. Home to major companies like Apple, Google, and Tesla, the city’s thriving economy is attracting young professionals and families alike.
Approximately 43% of Austin households rent their homes, and the city’s rent growth rate of 16.5% year over year is among the highest in the nation. Crexi data shows that occupancy rates for multifamily properties in Austin reached 88.5% in 2022. The platform also reported a median asking price of $230 per square foot, up from $210 in 2021.
5. Seattle
Population: ~3.9 million (metro area)
Median Rent for 2-bedroom Units: $2,720
Occupancy Rate: 83%
Year-over-Year Rent Growth: 11.2%
Seattle, the largest city in the Pacific Northwest, boasts a thriving tech industry, with major players like Amazon and Microsoft headquartered in the area. Seattle’s strong job market and high quality of life make it an attractive destination for renters, contributing to the city’s multifamily market growth.
Nearly 43% of households in the Seattle metropolitan area rent their homes, and the city has seen an 11.2% increase in rent year over year. Crexi data reveals that the median asking price for multifamily properties in Seattle has risen to $335 per square foot, up from $310 in 2021. The platform also reported an occupancy rate of 83% for multifamily properties in 2022.
6. Atlanta
Population: ~6 million (metro area)
Median Rent for 2-bedroom Units: $1,665
Occupancy Rate: 85.2%
Year-over-Year Rent Growth: 7.6%
Atlanta, the capital of Georgia, is a major transportation hub and a growing economic center in the southeastern United States. The city’s robust job market, affordable living costs, and diverse cultural scene make it an appealing destination for young professionals and families.
In the Atlanta metro area, 41% of households are occupied by renters. The city has experienced a 7.6% year-over-year rent growth, with the median rent for a two-bedroom unit reaching $1,665. Crexi data shows that the occupancy rate for multifamily properties in Atlanta increased to 85.2% in 2022, up from 82% in 2021. The platform also reported a median asking price of $195 per square foot for Atlanta multifamily properties, up from $180 in 2021.
7. Denver
Population: ~3.1 million (metro area)
Median Rent for 2-bedroom Units: $2,100
Occupancy Rate: 87%
Year-over-Year Rent Growth: 8.7%
Denver, the capital of Colorado, is a rapidly growing city with a strong economy and abundant job opportunities in industries like technology, aerospace, and renewable energy. The city’s diverse recreational activities and excellent quality of life make it a desirable destination for renters.
Approximately 42% of households in the Denver metro area are rent
er-occupied, and the city has experienced an 8.7% year-over-year rent growth. Crexi data shows that the occupancy rate for multifamily properties in Denver reached 87% in 2022, up from 84% in 2021. The platform also reported a median asking price of $265 per square foot for Denver multifamily properties, up from $250 in 2021.
8. Tampa/St. Petersburg
Population: ~3.1 million (combined metro area)
Median Rent for 2-bedroom Units: $1,575
Occupancy Rate: 82.4%
Year-over-Year Rent Growth: 5.5%
Tampa and St. Petersburg, located on Florida’s west coast, form a vibrant metropolitan area with a strong economy and growing population. The area’s thriving tourism industry, combined with its business-friendly environment, make it an attractive destination for renters and investors alike.
About 37% of households in the Tampa/St. Petersburg metro area rent their homes, and the region has seen a 5.5% increase in rent year over year. Crexi data reveals that the median asking price for multifamily properties in the Tampa/St. Petersburg area has risen to $170 per square foot, up from $160 in 2021. The platform also reported an occupancy rate of 82.4% for multifamily properties in 2022.
9. Phoenix
Population: ~4.9 million (metro area)
Median Rent for 2-bedroom Units: $1,625
Occupancy Rate: 86.5%
Year-over-Year Rent Growth: 12.5%
Phoenix, the capital of Arizona, has a booming economy driven by industries like technology, manufacturing, and healthcare. The city’s strong job market, affordable living costs, and year-round sunshine make it a popular destination for renters.
In the Phoenix metro area, 38% of households are occupied by renters. The city has experienced a 12.5% year-over-year rent growth, with the median rent for a two-bedroom unit reaching $1,625. Crexi data shows that the occupancy rate for multifamily properties in Phoenix increased to 86.5% in 2022, up from 84% in 2021. The platform also reported a median asking price of $185 per square foot for Phoenix multifamily properties, up from $175 in 2021.
10. Charlotte
Population: ~2.6 million (metro area)
Median Rent for 2-bedroom Units: $1,475
Occupancy Rate: 84.2%
Year-over-Year Rent Growth: 6.2%
Charlotte, the largest city in North Carolina, is a major financial center and a growing economic powerhouse in the southeastern United States. The city’s diverse economy, business-friendly environment, and high quality of life make it an appealing destination for young professionals and families.
Approximately 39% of households in the Charlotte metro area are renter-occupied, and the city has experienced a 6.2% year-over-year rent growth. Crexi data shows that the occupancy rate for multifamily properties in Charlotte reached 84.2% in 2022, up from 81% in 2021. The platform also reported a median asking price of $205 per square foot for Charlotte multifamily properties, up from $190 in 2021.
In conclusion, 2023 is shaping up to be a promising year for multifamily investors. The top 10 cities I’ve outlined above offer strong rent growth, occupancy rates, and investment opportunities. As an experienced multifamily investor, I encourage you to explore these markets and consider
them for your next investment. Keep in mind that market conditions can change, so it’s essential to stay informed and conduct thorough due diligence before making any investment decisions.
Remember that location is key, but so are factors like property management, financing, and local regulations. Networking with other investors and professionals in the industry can also be invaluable as you navigate the multifamily market.
Finally, stay focused on your investment goals, whether you’re seeking cash flow, appreciation, or a mix of both. By staying informed, conducting thorough research, and leveraging your network, you’ll be well-positioned to capitalize on the booming multifamily market in 2023 and beyond.
Happy investing!