Among the reasons for high returns has been an influx of new residents moving into certain areas, according to the report. The Phoenix market, for example, experienced the largest increase in household migration nationwide during 2020, the report found. The city also tied for the top spot in total migration with California’s Inland Empire, which benefited from an influx of residents moving east from Los Angeles to Riverside.

Concurrently, capitalization rate compression was greatest in Phoenix; Tampa, Florida; and Charlotte, North Carolina. All three markets experienced a more than 100-basis-point decline from the prior three-month period.

“We call them the sunbelt market affectionately,” she said of the most notable investment bright spots. “These would be markets in the South and Southwest. By name, some of the ones that are performing best – and expected to continue to perform best – are Phoenix and metros in Florida like Tampa and Fort Lauderdale in the south Florida area. Also, we’re seeing Riverside-San Bernardino. So really the southern part of the US is performing exceptionally well.”

Another factor attributable for the explosive growth in multifamily is that many are being priced out of the housing market against a backdrop of ever-escalating home values, Rasmussen said.

“Gosh, those home prices are skyrocketing,” she said. “It’s just mind-blowing. People have to live somewhere. Even though a lot of people want to get into the single-family market, they’re just priced out of it. Especially the Millennials who have been priced out for a long time.”