Suburban Sun Belt Dominates List of High Growth Submarkets

A handful of submarkets across the nation logged ultra high inventory growth rates over 10% in the past year – and suburban Sun Belt submarkets dominate that list.

RealPage Market Analytics examined the 706 submarkets within the nation’s 50 largest apartment markets in the country and ranked them based on inventory growth in the year-ending 1st quarter 2023. Among those, 15 submarkets logged inventory increases north of 10%. Not surprisingly, the dominating region on the list was the Sun Belt – the nation’s powerhouse for both supply and demand in recent years as population growth soared in the years since the COVID-19 pandemic.

Of course, any discussion on sizable apartment supply volumes would have to include Dallas/Fort Worth. Among the submarkets surveyed, the south suburb of Burleson/Johnson County in Fort Worth saw the most inventory growth, with an all-time high increase of 20.1%. Two other Fort Worth submarkets top the inventory growth list, including North Fort Worth/Keller (13.4%) and South Arlington/Mansfield (12.4%). The only Dallas submarket to make the list was Frisco, with growth of 14.9%.

Inventory growth is often coupled with apartment demand. While much of the Dallas/Fort Worth metropolitan area experienced softening apartment demand recently, the northern suburban submarkets of North Fort Worth/Keller and Frisco were leaders for absorption in the past year, offsetting the weakness in some other submarkets across the Metroplex. 

Overall, Dallas/Fort Worth remains the nation’s construction powerhouse, with more than 74,000 units currently under way – an all-time high. Of those scheduled deliveries, a great deal will be focused on the same submarkets that logged these big increases in the past year.

Jacksonville’s Mandarin submarket also logged an all-time high inventory growth rate in the year-ending 1st quarter. The apartment base jumped 19.9%, the second largest showing nationwide. Mandarin is also a demand hot spot, leading Jacksonville absorption in the past year and making up for some softening in other parts of the market. Looking forward, Mandarin is set to continue with high supply volumes in the near term.

Three Phoenix submarkets saw inventory grow by more than 10% in the past year. Central Phoenix logged the biggest increase at 15.9%, while Gilbert and Avondale/Goodyear/West Glendale recorded increases of about 11% to 12%. High volumes of new supply is nothing new for the Phoenix apartment market. This is one of the fastest growing apartment markets of the last decade. Similarly, nearly all Phoenix submarkets logged solid demand in the past year. Gilbert, however, logged an especially strong absorption showing.

Austin has also logged a lot of new supply in recent years. Two Austin submarkets made the list – East Austin (13.3%) and the northern suburb of Round Rock/Georgetown (12%). East Austin is located just across Interstate 35 from the urban core and has grown in recent years into an extension of a walkable area with bars and restaurants. Round Rock/Georgetown remains the tech center for the market, supplying a solid number of jobs. Although annual demand in Austin as a whole slowed in 2023’s 1st quarter, East Austin and Round Rock/Georgetown continued to see positive absorption.

The remainder of the submarkets on the top inventory growth list are in Nashville, Washington, DC, Tampa, Houston and Atlanta.