Renters in the Sun Belt may soon see some relief as investors flee the market amid an oversupply of apartments.
After a months-long surge, rents are finally cooling off — particularly in the Sun Belt, as a result of supply hitting the market. But the dynamic has since changed and supply is now poised to exceed demand, which will be helpful for millions of renters.Before the pandemic, there were around 725,000 units under construction nationwide, CoStar data revealed, with around 337,000 “absorbed” over the last 12 months. The term absorption refers to how much space — or units — are leased in a given period. It essentially is a metric investors use to track when a tenant occupies a space and when the space is unused.
“In Austin today, we have 44,000 units under construction, while we have 6,200 units absorbed,” Littell said. In Atlanta, the market is poised to see negative absorption, he added. Negative absorption refers to when the rental unit sees no tenants for a lengthy period of time. With rent growth stalling, some multi-family investors are fleeing the Sun Belt, seeking refuge in Midwestern real-estate markets.