Apartment Demand More Than Doubled in Q1

Article originally posted on Globe St. on April 16, 2024

In the early months of 2024, apartment demand more than doubled, putting it well above the decade average, according to a new report from RealPage.

“We might be in for a banner year for absorption,” the firm’s analyst Kim O’Brien said in the report.

But truly, RealPage said, this Q1 2024 performance is another indication of a return to seasonal market norms for the US apartment.

After dismissing the past three years of “unprecedented behavior triggered by the COVID-19 pandemic,” RealPage said it’s “perfectly typical” for absorption to get stronger in first quarter after the seasonal slump in fourth quarter – which is what the industry endured.

“Historically, first quarter demand isn’t even the time when most of the year’s absorption generally takes place,” O’Brien said.

During the past decade, the first quarter has captured only 4% of the year’s total demand volume.

Quarterly absorption went from just over 49,000 units in Q4 2023 to more than 103,800 units in Q1 2024, according to data from RealPage Market Analytics.

Quarterly apartment demand has been positive for five consecutive quarters now, which is “quite the comeback,” O’Brien said, after three quarters of significant net move-outs in the final three quarters of 2022.

In the past decade, first quarter tended to see demand at about 52,231 units. That was 39,970 units more than fourth quarter’s average volume.

“From that perspective, it’s clear the jump was quite a bit above average in 2024, as first quarter demand was twice the long-term volume and was 54,663 units ahead of 2023’s fourth quarter showing,” O’Brien said.

The biggest Q1 surge in demand was in Seattle, Dallas, Austin and Las Vegas.

Contrarily, gateway markets New York, Newark and Los Angeles saw demand volumes fall significantly between Q4 2023 and Q1 2024.