Huntsville has long been known as a “boom town” for its rocket testing and strong economic growth, but in recent years, the explosion of new apartment construction has truly caught attention. In fact, it outpaced every other market in the country, growing at more than double the rate of any other.
Our independent research for the Multifamily Market Recap at the close of 2024 revealed the following:
*Data based on David Wilson’s personal research record since 1994; pertains to only market-rate properties
So, what sparked this construction boom? A perfect storm of factors:
- A severe local housing shortage in 2018-2020
- A tremendous population and employment explosion
- Three years of national records for high apartment occupancy rates and rent growth
- National #1 ratings for Best Place to Live, Best Place to Retire, etc.
- Cheap money – ridiculously low interest rates, until mid-2022
- Abundant vacant land – no barriers to entry
These combined elements led to a race among developers to get new properties off the ground, while national data services were slow to catch up, still portraying a more optimistic picture.
This perfect storm has resulted in slow lease-ups for individual properties, with most properties now offering one to three months free rent. This phenomenon has led to serious pain for the developers, although residents are benefitting from abnormally low rents.
The bright side? Annual demand for units remains at record levels, and the outlook for continued high demand is strong. Even with all the new construction underway, if demand holds steady through 2024, market occupancy could reach 90%-93% in one to two years. That’s a positive sign.
Want to dive deeper? Download our full report here
ABOUT THE AUTHOR
David Wilson, MAI | Land Specialist
David Wilson joined Crunkleton Commercial Real Estate Group in November 2024, bringing over 30 years of experience in commercial real estate. His career spans multiple sectors and markets, with a strong background in apartment investment sales, commercial real estate appraisal, and multifamily housing market analysis.
In the mid-1990s, David developed Huntsville’s first comprehensive apartment market report, a resource he has updated annually ever since. His personally researched construction pipeline inventories are widely regarded as the most reliable in the industry.
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