Colorado-Real-Estate-Journal_458967

Page 4 — Multifamily Properties Quarterly — May 2025 www.crej.com MARKET UPDATE www.hcm2.com Colorado Springs, Colorado The O’Neil Group + VeLa Development Partners O ver the past several years, the multifamily housing market has demonstrated a remarkable ability to absorb unprecedented levels of new supply. Even as the industry experienced the highest construc- tion surge since the 1980s, demand proved stronger than anticipated, stabilizing occupancy and support- ing a positive rent growth outlook heading into 2025 and beyond. At the national level, while new deliveries peaked at historic lev- els in late 2024 and early 2025, reaching more than double the average annual rate from 2015 to 2019, occupancy remained rela- tively stable at 94.4% (Freddie Mac, 2025). Rent growth was modest but positive, and, most impor- tantly, the market demonstrated resilience even amid high interest rates, inflationary pressures, and economic uncertainty. According to RealPage data, annual multifam- ily demand topped 490,000 units in 2024, one of the highest figures on record outside the immediate post-pandemic boom (Freddie Mac, 2025). While national fundamentals are encouraging, the mountain west and desert regions stand out as exceptionally resilient. Markets like Colorado Springs, Salt Lake City, Las Vegas, and Boise, Idaho, absorbed their recent influx of new supply much faster than initially forecasted, setting the stage for strong performance in the years ahead. In the moun- tain and desert states, annual supply reached its peak in early 2025, tripling the delivery volume from just a few years prior (Real- Page, 2025). How- ever, construc- tion pipelines are shrinking rapidly, with units under construction already declining significantly. This supply modera- tion, combined with enduring pop- ulation and employment growth, points toward a tightening market and renewed pricing power for landlords. Occupancy in the region held strong even at the peak of new deliveries. As of the first quarter, regional occupancy averaged 95% or higher in several of our target markets, including Boise (95.2%), Fort Collins (95.2%) and Greeley (95.8%) (RealPage, 2025). In larger markets like Las Vegas and Salt Lake City, occupancy rates have stabilized near 94%-95% even with notable supply growth, highlighting the depth of renter demand. After a period of flat or slightly negative rent growth tied to peak supply absorption, RealPage fore- casts a return to positive rent growth in the mountain and des- ert regions beginning in late 2025. Year-over-year rent growth is already showing signs of inflection, with asking rents stabilizing in early 2025 and forecasted to accel- erate through 2026 and beyond. This regional performance reflects broader demographic and economic trends. Migration into the mountain west remains strong, driven by affordability, quality of life, and robust employment bases. Cities like Denver, Salt Lake City and Boise continue to attract young professionals and families priced out of coastal markets. Meanwhile, the high cost of homeownership – exacerbated by elevated mort- gage rates – keeps many would-be buyers renting longer. According to Freddie Mac, the monthly cost to finance a home remains nearly twice the cost of renting in many metros, reinforcing rental demand (Freddie Mac, 2025). Additionally, new construction challenges – including material costs, labor shortages and financ- ing headwinds – are expected to limit future multifamily starts. After the surge: Less new supply and higher rents Kevin Brinkman Founder and chief executive officer, Brinkman Real Estate Please see Brinkman, Page 24 RealPage, 2025 Annual multifamily supply peaked in early 2025, but new construction starts are now declining sharply, supporting occupancy stability.