U.S. Multifamily Market Snapshot: Past Sales Slowdown vs. Future Construction Pipeline
- Dennis Lee
- 7 days ago
- 2 min read
As expectations for gradual interest rate cuts grow, the U.S. multifamily market is entering a transition period. Over the past three years, elevated rates led to a broad slowdown in transaction activity, while a large wave of post-pandemic approvals is set to deliver significant new supply over the next three years.
To illustrate how these forces interact, this analysis maps the top 50 metros using two percentile-based indicators:
X-axis: Past 3-year multifamily sales volume (>$2M)
Y-axis: Expected multifamily completions over the next 3 years
Plotted across four quadrants, the metros reveal the relationship between recent demand trends and upcoming supply momentum.
Quadrant Summary
🔴 Q1 — Higher past sales & higher future construction
High Past Sales · High Future Construction
Key trait: Markets where transaction activity held relatively strong even during the slowdown, and future construction volumes are also elevated.
Examples: New York, Los Angeles, Chicago, Washington DC, San Francisco, Boston, Seattle, Atlanta, Phoenix, etc.
🟢 Q2 — Lower past sales & higher future construction
Low Past Sales · High Future Construction
Key trait: Markets that saw significant transaction slowdown, while construction pipelines remain large and active.
Examples: Dallas, Houston, Austin, Charlotte, Miami, Orlando, Kansas City, Columbus, etc.
🟠 Q3 — Lower past sales & lower future construction
Low Past Sales · Low Future Construction
Key trait: Markets with muted transaction activity and modest construction levels, indicating relatively quiet and steady market dynamics.
Examples: Baltimore, Pittsburgh, Cincinnati, Indianapolis, Buffalo, Providence, etc.
🔵 Q4 — High Permits / Low Rent Growth (Oversupply Risk)
High Past Sales · Low Future Construction
Key trait: Markets where transaction activity remained comparatively resilient while upcoming construction volumes are limited, resulting in tighter supply conditions.
Examples: Riverside, St. Louis, Nashville, San Jose, Virginia Beach, Cleveland, etc.
📌 Broader Patterns Observed Across the 50 Metros
1) Supply pressure is most prominent in several Sunbelt markets
Large pipelines remain underway in metros such as Dallas, Austin, Houston, Charlotte, and Orlando, even as transactions were compressed.
2) Coastal gateway markets show strong historical activity and relatively contained pipelines
New York, Boston, San Francisco, and Washington maintain comparatively higher transaction rankings with moderate future supply.
3) Many Midwest/Rust Belt markets remain low-volatility environments
Cincinnati, Indianapolis, Cleveland, and similar metros show low levels on both metrics, reflecting stable and less cyclical conditions.
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Dennis Lee
CEO at Market Stadium
Prev. Lionstone Investments Research Team
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