$929 2Q 2024
2.4%
96.2% 2Q 2024
0 BASIS POINTS
213 [YTD: 298]
99 [YTD: 339]
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
The Springfield metro area experienced a vigorous spring leasing season as 213 units absorbed in the second quarter. This marks the second-highest absorption rate for a spring period in the past decade, underscoring the strength of rental demand in Springfield. Greene County emerged as the hotspot, accounting for over half of the absorbed units at 117. Southeast Springfield and Christian County also demonstrated robust rental activity during this period.
Developers remain active in the Springfield region, though there are signs of a slowdown in new development. The pace of deliveries is expected to decline from a 16-year high of 770 units in 2023 to 450 units in 2024. Currently, 552 units are under construction across the Springfield region, concentrated in just three of the nine submarkets. Greene County leads with 215 units under construction, followed by Christian County with 192 units, and Southwest Springfield with 145 units.
As demand has generally kept pace with new supply, stabilized occupancy rates have remained relatively steady over the last four quarters. Checking in at 96.2% in the second quarter of 2024, stabilized occupancy remained unchanged from one year prior, while experiencing a 10-basis point uptick on a quarterly basis. Demand for higher-quality assets continues to be positive, with absorption reaching 120 units in this segment over the last four quarters. However, this trailed the number of new units introduced to the market, shifting the average occupancy rate in this segment down to 94.0% in the most recent quarter.
Looking forward, the pace of new deliveries appears to be tapering downward, which should enable rental demand to meet or exceed these deliveries. Average occupancy is expected to hold at its current level of 96.2% through the balance of 2024 before ticking upwards moving into the prime leasing season of 2025.
Springfield is a lower-cost market, with effective rents averaging $929 as of the most recent quarter. Coupled with occupancy rates well above the national average, Springfield’s rent growth continues to outpace many larger neighboring markets, giving it a competitive edge. Over the past year, effective rents have increased by 2.4%, compared to the national average of 1.0%. Looking at a longer timeframe, Springfield has achieved a 14.3% increase over the past three years, surpassing the national average of 11.1%.
On a submarket level, annual rent growth has varied, though all submarkets reported positive growth in the second quarter of 2024. Rental increases ranged from a low of 0.3% in Southwest Springfield, which is also the only submarket in Springfield with average rents exceeding $1,000, to a robust annual increase of 6.6% in the North Springfield submarket. The latter saw the delivery of one new asset in 2023 but currently has no new projects in the pipeline.
Average Monthly Mortgage Payment
Average Monthly Rent
|
Under 35 Years
|
35 to 44 Years
|
45 to 54 Years
|
55 to 64 Years
|
65 to 74 Years
|
75 to 84 Years
|
85 Years & over
|
|---|---|---|---|---|---|---|
|
0.3%
|
-0.7%
|
-1.0%
|
0.2%
|
0.7%
|
0.3%
|
0.0%
|
The 65-74 age group is the fastest-growing renter demographic in the Springfield, MO metro area, expanding by 0.7% from 2019 to 2022. This trend underscores a demand for housing that is conveniently located near healthcare facilities and lifestyle amenities such as parks and golf courses.
The multifamily market in Springfield is expected to continue outperforming the national benchmarks. Rental demand is anticipated to meet or exceed new supply over the next four quarters, supporting above-average occupancy rates across Springfield, while rent growth is forecasted to accelerated north of 3.0% by the close of this year, driven by Springfields relative affordability and a measured pace of new deliveries. Overall, Springfield’s multifamily market is poised for steady growth and resilience heading into 2025.
