Hartford's Booming Multifamily Market
Hartford, Connecticut's multifamily housing market is experiencing a remarkable surge, setting new records and drawing significant interest from both investors and renters. In 2021 and 2022, the city saw an average of 550 units delivered annually. This number jumped to nearly 800 units in 2023, with projections indicating that over 1,600 units will be delivered in 2024—a historic high for Hartford.
Despite this influx of new supply, demand remains strong. Interestingly, this demand is driven more by a trend toward smaller household sizes rather than a growing population. According to the U.S. Census Bureau, Hartford's metropolitan area experienced a modest 0.3% decline in population from 2010 to 2020, well below the national growth rate of 7.4%. While recent estimates suggest slight improvements in population numbers as of 2022, the region's stagnant growth continues to present challenges.
Key Market Insights:
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Vacancy Rate: Hartford's vacancy rate is currently at 4.5%, significantly lower than the national average of 7.8%. This low vacancy rate has given landlords more leverage to increase rents.
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Market Asking Rent/Unit: The average market asking rent in Hartford is $1,688 per unit, just below the national average of $1,713.
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Vacant Units: There are approximately 3,100 vacant units in Hartford, compared to 1.6 million nationwide.
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Studio Asking Rent: Studio apartments in Hartford have an average asking rent of $1,258, while the national average stands at $1,548.
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1 Bedroom Asking Rent: The average asking rent for a one-bedroom unit in Hartford is $1,520, slightly below the national average of $1,538.
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2 Bedroom Asking Rent: For two-bedroom units, the average asking rent in Hartford is $1,863, higher than the national average of $1,794.
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3 Bedroom Asking Rent: The average asking rent for three-bedroom units in Hartford is $2,314, compared to the national average of $2,204.
Sales and Investment Trends:
Hartford's market sale price per unit stands at $149K, lower than the national average of $223K. The 12-month asking sale price per unit in Hartford is $143K, compared to $193K nationally. The market cap rate in Hartford is 7.3%, above the national average of 6.1%, providing attractive opportunities for investors seeking higher returns. Over the past year, Hartford's multifamily market has seen a sales volume of $198M, with 72 transactions recorded.
New Construction and Inventory:
The city currently has 69,183 inventory units, with 2,237 units under construction. Over the past 12 months, 1,154 units have been delivered, with a 12-month construction start figure of 684 units.
Economic Context:
Hartford's economy is supported by a diverse array of sectors, including strong education and healthcare industries. The city is home to four Fortune 500 companies—Cigna Group, Hartford Financial Services Group, Stanley Black & Decker, and Otis Worldwide—as well as major employers like Aetna, Pratt & Whitney, and ESPN. However, the region's stagnant population growth continues to pose challenges, impacting demand forecasts.
Hartford's multifamily market stands out for its low vacancy rates and strong rent growth, with an annual increase of 4.7%, significantly above the national average of 1.2%. As new developments continue to shape the market landscape, investors and stakeholders must stay informed to capitalize on emerging opportunities and navigate potential challenges.
Stay tuned for more insights and updates on Hartford's dynamic real estate market. For an in-depth analysis and expert opinions, subscribe to our newsletter!
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