Like the booming housing market, Wichita’s multifamily market remains strong

Much like Wichita’s housing market, which is booming, the multifamily sector also is doing well.

“Overall, it’s remained strong with both occupancies and sales transactions, and we’re seeing new development continue, possibly at a slower pace, though,” said Jeff Englert, a multifamily specialist at NAI Martens.

The firm produces an annual report updating what’s happening with the multifamily market in Wichita.

To Englert, one of the most interesting facts to come out of the report is that the number of multifamily transactions — the number of apartment units sold — continues to remain strong.

He said that “2019 was one of the best years that we’ve seen in the market, just behind 2014, with almost 2,500 units sold.”

In the first four months of 2020, 1,000 units have been sold.

“We’re already almost halfway of where we need to be for the whole year.”

Englert said buyers took a brief pause when the pandemic first struck but quickly got back to making deals.

“The financing’s still out there to get them done, too, so we’re seeing a lot of good activity right now.”

Englert said some sellers are getting more creative to get deals done — such as offering their own financing — and investors still seem to consider apartments a safe investment.

One of the biggest areas of new apartment activity is in the area around Wichita State University with student housing.

“There’s been so many new units (and) new properties built over there,” Englert said.

“Over half of the units being built in Wichita over the next couple of years are focused on the area right around WSU.”

That includes Aspen Heights just north of 21st and Oliver and Seventeenth near 17th and Bluff.

In 2019, the new properties on campus accounted for 32% of new ones in the market.

Now, Englert said, “You start wondering if it’s being overbuilt.”

However, he said you have to consider demolitions of older housing in the area, such as Fairmount Towers, and recent enrollment growth.

“They’ve really got the people there to support the new units on the property.”

A big focus of the report is how the multifamily market has been affected by COVID-19.

So far, there doesn’t seem to be much of an impact.

Large property management firms report that 10% or fewer tenants say they can’t pay or are having difficulty paying rent because of the pandemic or resulting job losses.

“It’s had very minimal impact on the multifamily market and rent collection,” Englert said.

He said he thinks stimulus money probably helped, as did the state’s temporary freeze on evictions.

“It’s still to be determined if there will be more of an impact due to COVID.”

The report also tracks rents and occupancies.

Occupancy remains strong at 94%.

Rents are relatively stagnant at a 1% increase over last year, but 2019 saw a 4.5% increase over 2018. The average is a 3% increase, so that’s still on target.

On average, Wichita sees 600 new units added to the market each year. In 2019, there were 700.

Englert said 2020 looks like it will have about 450. That number isn’t low because of the coronavirus, he said. It’s more about the timing of developments. He thinks that number will jump to 700 next year.

More than anything, Englert said, he thinks developers are “just seeing where the market is and not getting . . . too overaggressive on it.”

This story was originally published June 24, 2020 at 11:18 AM.