The city of Augusta, Georgia, is about 150 miles east of Atlanta, tucked squarely against the South Carolina border. It has about 200,000 people and a golf course you’ve probably heard of — Augusta is where they play the Masters Tournament.

The median rent for a one-bedroom apartment is about $970. And you can find one pretty easily. Of all the cities of its size that the website Apartment List tracks, Augusta has the highest vacancy rate in the country at around 11%.

“Our property managers are telling me traffic is not what we’ve seen,” said Paul King, president of Rex Property & Land, a company that converts historic properties into midsize apartment buildings. “We’re putting out a lot of ‘Half off first month’s rent’ — various forms of discounts to try to boost our traffic.”

King said part of the city’s high vacancy rate is due to the recent completion of a nearby nuclear power plant. The mostly temporary construction workforce is now pretty much gone.

But a longer-term issue? The shiny, new apartment building going up just around the corner.

“We’ve got properties we developed as recently as [2023],” King said. “But two blocks up the street is a brand-new building that they’re not even finished constructing but have already started leasing, so yeah, that impacts us. And they’ve got hundreds of units.”

According to the website Apartment List, the national vacancy rate hit 6.7% last month, the highest since the early days of the pandemic and higher than what was generally considered normal pre-pandemic. Vacancies are highest in markets across the Sun Belt that boomed during the pandemic.

“It’s a supply-side story,” said Susan Wachter, professor of real estate at the University of Pennsylvania’s Wharton School. “Supply has gotten ahead of demand.”

Last month the number of newly constructed apartments hitting the market nationally reached a high not seen since 1986, according to the National Association of Home Builders.

“Demand increased right after pandemic started, and then supply surged,” said Wachter. “The supply surge is at this point at many markets in the Sun Belt more substantial than the demand growth, which is petering off.”

The groundbreaking ceremonies for a flood of new buildings happened a couple of years ago, when it felt like everyone in the country was relocating to places like Atlanta and Austin, Texas.

But now that the final touches have been put on the ground-floor gyms and rooftop pools, that exodus from expensive coastal markets is basically over.

“It has definitely cooled down,” said Rick Palacios Jr., director of research at John Burns Research and Consulting. “And now return to office has picked up and people are saying, ‘Hey, I want you to be within an hour, maybe, of the office.'”

High vacancy rates have caused rents in markets like Austin, Atlanta and Raleigh, North Carolina, to decline more than 4% year over year, although they’re still higher than they were before the pandemic.

Augusta property manager Paul King said that for a lot of his competitors who borrowed big money to build those big apartment buildings, lowering rents can be tricky.

“Generally the bank is the No. 1 bill, whatever the lender is,” said King. “They have obligations that they said, ‘These will be our price points.’ If they turn in a rent roll and they’re not hitting their price point, they could have their loan called.”

King said he’s just trying to get the same rents as last year, but sometimes he has to settle for less.