The ongoing pandemic has dominated the market-level investment narrative since mid-2020. However, national and local economies have learned to cope with the pandemic more effectively and its impacts are less disruptive.
Moving into 2022 and beyond, fundamentals of supply and demand along with traditional considerations of labor growth and productivity, residential affordability, and the attractiveness of markets to new businesses and residents, will take center stage. As a result, significant shifts in the Matrix should become less frequent.
As employers call workers back to the office and commute times become relevant once again, the demand for apartments in coastal gateway markets will continue to recover. However, if WFH policies becoming permanent within companies, these markets would likely be negatively impacted.
Coastal gateway markets’ gain, however, does not mean a reversal of the Sun Belt’s positive trajectory bolstered by the pandemic. Sun Belt markets will remain attractive and continue to grow due to their relative affordability and appeal to renters with the means and flexibility to relocate. However, the growth rate across these smaller markets will likely return to a more normal pace.