Despite improvement in 2023, apartment demand has been quite low for more than two years. In that time, the new construction pipeline delivered a flood of new units that expanded supply to an extent not seen in decades. This dynamic has taken a dramatic toll on multifamily average occupancy. From its peak in late 2021 of about 95%, the national average occupancy closed February at 89%.

With new supply not due to slow this year, further improvement in apartment demand will be necessary to mitigate the continued downward pressure on occupancy. With that in mind, and as a companion to the ALN newsletter this month which detailed developments in rent performance, here are some markets which have seen the most improvement in net absorption in the last three months relative to the same three months a year ago.

All numbers will refer to conventional properties of at least 50 units. It will also be important to bear in mind that many of these top performers are being compared to a period a year ago in which net absorption was negative. Therefore, the improvement in net absorption for these markets will be larger than the net absorption total for the recent three-month period.

By virtue of their size, primary markets will naturally dominate any top ten list that is determined by unit change. In order to highlight some of the smaller markets that have also seen robust improvement in apartment demand, below are the top ten markets according to net absorbed units as a share of existing stock. New York and Miami remain on the list, a testament to their positive results recently, along with eight newcomers.