When the media says, “the real estate market is down” or “rents are falling nationally,” it makes for a good headline, but it misses the truth. In reality, there is no single “real estate market,” only a collection of local markets, each moving on its own fundamentals: supply pipelines, job growth, demographics, and wage dynamics. These are the forces that ultimately determine whether rents are growing, holding steady, or declining.
Understanding these nuances is the key to successful multifamily investing. In this month’s GVP Insights, we take a closer look at the five markets on our radar, their unique dynamics, the fundamentals driving them, and the opportunities they each present.
Market Snapshots: A Tale of Five Realities
· San Diego & Orange County, CA
Vacancy rates remain among the lowest in the U.S. (CoStar, 2024), with zoning restrictions and entitlement hurdles keeping new supply well below demand. These barriers create markets that are steady rather than volatile. Strong, diverse economic drivers from healthcare and biotech to defense and tourism paired with a high quality of life ensure demand remains resilient even through cycles.
Opportunity: While they rarely experience big swings, that consistency is valuable. For investors, these markets function as stabilizers in a portfolio: steady rent growth, low volatility, and appreciation potential.
· Salt Lake City, UT
Nearly 10,000 units have been delivered over the last two years (RealPage), keeping rents flat despite strong underlying demand. At the same time, Salt Lake has posted job growth above the national average for 12 straight years.
Opportunity: The softness here is more about timing than fundamentals. Investors who can lean into today’s flat rents are positioned to benefit once absorption improves and growth resumes. Importantly, the current supply wave is nearing its end, meaning strong demand with minimal new construction should set the stage for outsized rent growth. The opportunity to enter is now, before fundamentals reaccelerate.
· Phoenix, AZ
With more than 40,000 units under construction (Yardi Matrix), Phoenix is working through one of the largest supply pipelines in the country. Yet its population continues to grow at more than twice the national average (U.S. Census Bureau).
Opportunity: Not all parts of Phoenix are equally exposed. Infill locations near jobs and transit remain more durable, while the outlying sprawl bears the brunt of oversupply. That said, the supply wave is still in motion. Once these new units are absorbed, rent growth should follow. For now, we have not re-entered Phoenix because of these dynamics, instead, we are waiting for a more opportunistic entry point.
· Denver, CO
Rents have declined about 3% year-over-year (CoStar) as absorption has slowed. On top of that, local policies, including rent regulation at the county level and permitting hurdles, have added operating challenges. Growth has slowed at the same time a wave of new supply has come online, creating a difficult environment for both rent growth and operations.
Opportunity: The current opportunity set is highly selective and requires a submarket-by-submarket approach. Having boots-on-the-ground experience is critical to identifying which neighborhoods are best positioned and which should be avoided in today’s environment.
Why This Matters for Investors
National averages don’t tell the story.
Examples:
· In Denver, understanding county-level rent regulation helps distinguish which submarkets remain attractive.
· In San Diego and Orange County, buying from builders in supply-constrained, hard-to-entitle areas captures the benefit of scarcity without the risk of development.
· In Phoenix, real-time absorption data shows that infill submarkets continue to attract renters even while suburban areas struggle with oversupply.
· In Salt Lake City, buying when rents are flat, and closely tracking absorption data, can position investors ahead of the curve before growth resumes.
For investors, the takeaway is simple: it’s not enough to follow national data. The best decisions come from looking deeper, market by market, and often, submarket by submarket.
Closing Thoughts
At GVP, we share Insights because we believe that educated investors make the best long-term decisions. Our goal is to leave you better equipped to evaluate opportunities, ask sharper questions, and feel confident in where you choose to place capital. Thank you for reading, and as always, we welcome your thoughts and conversations on these insights.