They don’t call it Mile High City for nothing. Almost everything in Denver is running on a higher plane than other multifamily markets around the country. Its labor force is expanding at the fastest rate since the recession, resulting in a 3.2 percent unemployment rate. Denver rents have increased by 60 percent since 2012. After about 13 or 14 quarters when vacancy rates averaged below 5.0 percent, they have inched up to just 6.0 percent at the end of first quarter 2017, according to Ray White, vice president of JLL’s Rocky Mountain multifamily team. Along with a strong economy and educated workforce, optimism is also running high n Denver. “It’s all about lifestyle, generally,” White says. “People are coming to Denver because they want to be in Denver—and then they are finding a job.” 

Iowa’s capital city was the most affordable place to live in a recent U.S. News & World Report roundup of livable cities. For 2016, total vacancy rates were just 5.2 percent, and although that metric is expected to inch up in 2017, it should still be below 6.0  percent. From 2016 to 2017 rental rates for three-bedroom apartments are expected to increase by 6.8 percent, compared to 2.6 percent the previous year.

North Carolina has plenty of buttresses to support a strong multifamily market, it seems. In addition to Charlotte, the Tar Heel State offers Raleigh and Durham, about 25 miles apart, as markets that are best able to absorb the deliveries of newly constructed units. In its first quarter roundup, JLL found that the cities of Raleigh and Durham were among the cities that absorbed at least 2.0 percent of new construction from 2016. If that sounds like a market able to withstand cyclical challenges, consider that the area is home to three major U.S. universities: Duke University, the University of North Carolina-Chapel Hill and North Carolina State University. Low cost of living contributes to steady population growth, which expanded by 6.4 percent due to net migration from 2011 to 2015, according to the U.S. News & World Report.    

Salt Lake City is friendly to business and relatively inexpensive compared to many cities. That has kept its economy strong, helping to make the city number two on CoStar’s list of top markets for new development.

Developers had 6,527 new units of multifamily housing in some phase of the development process in Salt Lake City in the third quarter of 2018, according to CoStar. That works out to 9.9 percent of the current inventory.

MPF counts 3,237 new rental apartments under construction in the Salt Lake City-Ogden-Clearfield, Utah metro area. That’s equal to 3.1 percent of the inventory across the broader metro area.

San Jose is not just located in the heart of Silicon Valley; it is very much young at heart. The U.S. News & World Report survey notes that the city of 1.9 million ranks as the number one metro area for college readiness among high school students. Beyond its intellectual pipeline, San Jose has achieved technology sector employment levels that were 15.0 percent higher than peaks achieved pre-recession, according to Fannie Mae’s multifamily outlook for spring 2017. In the first quarter, San Jose’s vacancy rate averaged 4.75 percent, beating the national level, and asking rents were at $2,580, an increase of 2.0 percent over the year before. Looking ahead, 2017 is expected to be a strong year, with net absorption at just under 5.0 percent and vacancy rates at around 6.0 percent, according to CoStar figures cited in the Fannie Mae report. The former two indicators are expected to retract slightly through 2018, and then drop noticeably below about 3.0 percent after 2019.       

Among the country’s especially active building centers, Seattle now ranks as the leader for urban core apartment performance by a huge margin. Annual rent growth is running at 7.2 percent in the heart of downtown, and similar pricing momentum exists in adjacent urbanized zones like South Lake Union, Queen Anne and Capitol Hill.

So far in this economic cycle, urban Seattle has managed to digest some 19,600 units of new supply, and the downtown job base continues to expand very rapidly. Ongoing construction in the urban core tallies about 10,400 units, further putting absorption capacity to the test. Even with this new supply likely to slow urban Seattle’s rent growth pace from the sky-high level recorded now, the Emerald City still appears positioned to remain the nation’s healthiest urban apartment market for at least a couple more years.

Other downtown apartment markets currently recording strong performances include Philadelphia, Orlando, Fla. and Tampa, Fla. Downtown rents across the trio of cities are moving up about 5 percent to 6 percent annually. However, time on the rent growth leaderboard could prove short for these metros. Building activity is kicking into higher gear, after comparatively few urban core deliveries came to market over the past few years.

For a long time Charlotte remained in the shadow of higher profile southern cities like Charleston, S.C. and Atlanta. Now Charlotte has come into its own. In this commercial hub of the Tar Heel state, unemployment is at 4.0 percent and the population averages around age 36.9. Similar to other U.S. markets, Charlotte has seen net absorption fall since 2015, but that should rebound somewhat by 2018, according to the 2017 Southeast U.S. real estate market outlook from CBRE. Multifamily vacancy rates could dip below 7.0 percent in 2017.

Not to be outdone, Washington, D.C. earns a place in this roundup because the government, non-profit and legal sectors provide just as much locomotive power as the tech, financial and health sectors do in other cities. The young, well-educated and ambitious flock to well-known and affluent markets in Georgetown, DuPont Circle, Logan Circle and West End. “This is a very transient population. There are people who come and stay for a short time before continuing their education or transferring jobs, which make this an ideal market for multifamily owners,” says Christine Espenshade, a managing director at JLL. But the young and ambitious are not just going to a handful of select markets. The overflow of demand is also benefiting newer sub-markets, including Eckington and Takoma Park. The results are strong absorption and occupancy rates of 95.0 percent or better.