Missoula’s multifamily market entered 2023 with a vacancy rate of 2.91%.
Vacancy rates have edged up through 2022, rising almost a full percent in the fourth quarter. Most available units are located in the Mullan and Reserve submarket, where most of Missoula’s new housing construction is ongoing. The average Missoula apartment asking rent is $1,333.90 per month, up 17.87% over 2021 (based on trailing 12-month data). However, rents are softening slightly. On average, rents were down 0.6% across unit types from the third quarter.
As a result, renters have more units to choose from – a full range of unit types populate the market, including studios and three bedrooms. That’s notable as these options used to be very limited. The largest inventory is among one and two-bedroom units, making up 78% of availability. One limitation for renters is unit location. Options are still limited for those looking to locate near the University of Montana or downtown and midtown Missoula.
In 2022, about 500 new units delivered to the market. Of these, 75% were in the Mullan and Reserve submarket. An additional ±1,305 market-rate units are under construction. Over ±3,200 units are in the planning and permitting phase, though there is a likelihood that projects will be delayed. Developers are finding that projects no longer make sense financially due to construction costs and rising interest rates.
Over the past three years, demand far
outstripped supply in the Missoula
housing market. However, the market
shows signs of trending toward a
supply and demand balance.
The development pipeline shows
±1,305 new apartment units on the
way. But will Missoula grow enough
to fill those new apartments?
Most likely, the answer is yes. Get the full report for more info on what’s ahead for Missoula multifamily assets.