New Apartment Boomtowns May Be the Next Bubble
Soaring rents are drawing builders to Spokane and Boise, but post-pandemic uncertainties raise the risk of committing too soon.
Moving to Boise? So are apartment developers.
Source: Bloomberg
It was hard enough to build apartments in high-cost cities like San Francisco before the pandemic triggered an exodus from urban neighborhoods, and now the economics are even tougher. But that's giving smaller cities a chance to catch up to the rental boom that previously lifted other non-coastal metros like Austin and Denver. For builders, it's a riskier calculation.
The divergence in the rise and fall of rents between high-cost and low-cost metro areas means it makes better sense to build apartments in places like Spokane, Washington, than San Francisco — at least in the short-term.