A steady decline in rental prices across the Southeast is expected to enhance migration to the region, leading to strong net absorption and reduced vacancy in multifamily markets, according to Marcus & Millichap’s 2025 National Investment Forecast.
The report highlights that two-thirds of the 21 major metros in the region offer an average effective rent below the national median of $1,830 per month, making the Southeast an attractive and affordable option for residents and businesses alike. As a result, “all but six are projected to experience vacancy compression ranging from 10 to 50 basis points this year,” signaling healthy demand across key markets.
Over the next five years, major Southeast metros are positioned to see multifamily vacancy rates trend toward or even dip below historical averages, particularly as new construction slows. “Upward vacancy momentum in the multifamily sector may have crested,” the report noted, reinforcing a positive long-term outlook. Cities leading this expansion include Atlanta, Orlando, Tampa-St. Petersburg, Charlotte, and Houston, with these metros poised for sustained demand and growth.
Meanwhile, other Sunbelt areas, particularly in California, are expected to experience continued out-migration. While this shift presents challenges for those markets, it reinforces the Southeast’s competitive advantage in affordability and quality of life, making it an increasingly desirable destination for individuals and businesses alike.
The multifamily market will also benefit from a slowdown in new housing deliveries in 2025, which, coupled with steady population growth, will further support rent stability and potential appreciation. Markets such as Dallas-Fort Worth, Houston, and Austin continue to attract new residents thanks to strong employment growth, while cities like Charlotte, Phoenix, and Las Vegas are witnessing justified increases in new apartment construction driven by expanding household formations.
Florida’s multifamily sector is especially well-positioned, as Miami, Fort Lauderdale, Orlando, and West Palm Beach have seen a reduction in new deliveries, fostering healthy rent growth and demand for available units. In contrast, markets with slower population growth, such as some Midwest metros, are experiencing more limited expansion in new housing supply.
Vacancy Compression: Most Southeast metros are expected to see a decrease in vacancy rates, indicating stronger demand.
Rental Affordability: The average effective rent in these cities remains below the national median of $1,830, making the region an attractive option.
Population Growth: Cities like Atlanta, Charlotte, and Orlando are projected to experience strong population increases over the next five years.
New Housing Deliveries: A decline in new apartment supply in many metros could support rent stability and potential growth.
With a strong economic foundation, a competitive cost of living, and a steady influx of new residents, the Southeast remains one of the most dynamic and promising regions for multifamily investment in 2025 and beyond.
