One of the interesting trends from 2020 was how affordable markets - those with cheaper rents - significantly outperformed expensive markets in terms of rent growth. 

Apartments owners in these affordable markets (red dots below) did well in 2020 despite the pandemic/recession. Owners in the expensive markets (blue dots) struggled.

Will this trend continue into the future? That's the million dollar question.

I'm optimistic about affordable markets for two reasons:

1) Pre-COVID, the expensive markets benefitted from an agglomeration of business/industry/offices that drew in apartment/housing demand. Post-COVID some of that business and industry is moving to cheaper, more affordable places, and the housing demand is going with it. 

2) Supply. The affordable markets go overlooked by institutional developers and home builders, so there's not as much new or renovated inventory. This likely puts upward pressure on rents. 

What are your thoughts?