Rental Demand in Single Family vs Multi Family

In Georgia, the demand dynamics for single-family and multi-family housing have evolved notably in recent years, influenced by economic factors, construction trends, and investment activities.

Single-Family Housing Demand

The single-family housing market in Georgia has seen significant activity, particularly from institutional investors. In the Atlanta metropolitan area, corporate investors owned approximately 25% of the single-family market in 2022, totaling 71,832 homes. This substantial ownership stake by large firms has intensified competition, often making it challenging for individual buyers to secure properties. These investors are attracted by the region's population growth and favorable rental yields, leading to increased home prices and rents in targeted neighborhoods. 

Multi-Family Housing Demand

The multi-family housing sector in Georgia, especially in Atlanta, has experienced a surge in both construction and demand. In the third quarter of 2024, Atlanta saw the absorption of over 6,200 multi-family units, slightly outpacing new deliveries for the first time since mid-2021. Despite this positive absorption rate, the market contended with elevated vacancies and declining rents due to the record wave of new supply. Developers had 22,000 units under construction, representing a 4.2% expansion of the markets apartment inventory. This influx of new units has led to increased competition among property managers, contributing to a modest decline in rents.

Comparative Demand Analysis

Investor Influence: The single-family market has been notably impacted by institutional investors acquiring large numbers of homes, driving up prices and reducing inventory for individual buyers. In contrast, the multi-family sectora's growth has been propelled by new developments aiming to meet the housing needs of a growing population.

Occupancy and Rent Trends: While single-family rentals have seen rent increases due to limited supply and high demand, the multi-family market has experienced a slight decline in rents, attributed to the substantial addition of new units and the resulting elevated vacancies.

Construction Activity: Single-family home construction has decreased over the past couple of years, whereas multi-family construction has ramped up to address affordability concerns and the demand for rental housing.

In summary, Georgia's single-family housing demand is heavily influenced by institutional investment, leading to increased competition and higher prices. Conversely, the multi-family sector is expanding through new developments, aiming to balance supply and demand, though currently facing challenges related to elevated vacancies and rent adjustments.