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Market Report

Norfolk-Virginia Beach Multifamily Market Report

2024 Investment Forecast

Structural Shift in Housing Market
Emphasizes Rental Options for New Residents

Metro records regionally-low Class A vacancy. For most of the decade trailing 2024, it was less costly to make a home mortgage payment in Norfolk-Virginia Beach than to rent a top-tier apartment. However, entering the year, the trade-off had flipped. This dynamic is steering a larger portion of newly-forming households to Class A and B rentals, following near-decade high net in-migration last year. The recent surge in demand enabled top- and mid- tier vacancy to fall through most of last year, with the metro’s Class A rate ranking as the lowest among any major mid-Atlantic market as of late 2023. Boding well for sustained luxury sector declines, new supply in 2024 will be concentrated in Southern Norfolk and Williamsburg-Jamestown, areas that have recently observed easing vacancy overall. Roughly 1,400 units, or nearly 90 percent of this year’s pipeline, are slated for delivery between the two areas. Across property tiers, absorption will be supported by a diverse income profile of local renters. NAF Human Resources and BDO continue to hire in Norfolk proper, while James City County draws rental demand from students and staff at The College of William & Mary.
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