Intro
In off-campus purpose-built student housing, demand drivers heavily influence market performance, with the academic calendar dictating leasing cycles. Shifts in supply and demand can cause immediate and significant changes, making some markets perform better than others each year.
While certain markets continue to thrive, others face challenges such as oversupply, slower leasing velocity, or weaker demand, leading to underperformance.
Despite recent trends of strong rent growth and leasing velocity, not all markets have shared this success. Below, we spotlight markets that have notably underperformed thus far this cycle. Read on to discover which markets made the list and what could be behind their struggles:
Charleston, SC
College of Charleston
Charleston, SC, has been one of the stronger student housing markets nationally over the last 4+ years, where occupancy has averaged around 97%. The market average pre-lease sits at 71% — about 22% behind the prior leasing cycle as of the first week of May 2024.
There have been few to no beds delivered over the last three years, but supply and demand fundamentals are strong given there are over 10,300 full-time students at the College of Charleston and only 2,770 purpose-built student housing beds.
Rates have grown over 34% since May of 2021, which may be pushing students to look at other options in the market — student-competitive multi-family properties, SFR properties in the market, or even further away from campus in true conventional multifamily properties.
Waco, TX
Baylor University
Waco, TX, is home to the oldest operating university in Texas — Baylor University. This market has been strong fundamentally the last few years, but a slow lease-up is atypical from years past. Market pre-lease is 69%, behind about 5% YOY.
The average rate per bed in the market is $776, which, from an affordability standpoint, is about $230 per bed below the national average — affordability shouldn’t be a concern.
With tuition costs at the private university over $60,000 annually and just under two-thirds of students being in-state students, they may be looking at cheaper options than the purpose-built inventory.
Boone, NC
Appalachian State University
Boone, NC has experienced strong fundamentals with a high 95%+ occupancy rate and strong rent growth for the last 4+ years. This leasing cycle has been a little different than years past, as there has been a tempered lease-up across the market.
Market average pre-lease is 76.7%, about 14% behind, with no immediate pipeline in the next year or so. Average market rent growth in Boone has been close to 19% since May of 2023, which opens the market to affordability challenges given the slower lease-up this year.
Fayetteville, AR
University of Arkansas
Fayetteville has been one of the hottest student housing markets over the last 24 months. Rate growth over that period was around 27%, with monthly rates now at $849/bed, which is down 6% YOY.
Pre-leasing, which sits at 81.9% (behind 7.6% YOY), is strong in comparison to the national average of 73.2% as of 5/7/25.
With a healthy pipeline of new inventory coming over the next few years — 2,585 beds — affordability may be top of mind as the new pedestrian product traditionally commands a premium over the baseline market rents.
Final Thoughts
Understanding the nuances of each market is a defining characteristic of the off-campus purpose-built student housing sector. Having a clear view of supply and demand, accessing historical performance, and being proactive instead of reactive to trends is necessary to successfully navigate student markets.
College House continues to be a vital resource for all to help develop that understanding and allow all to make more informed decisions. Learn more by scheduling time with our team.
