In its latest outlook report for the multifamily rental market, Yardi Matrix outlined several reasons for hope for a solid recovery for the multifamily housing sector in 2021, especially during the second half of the year.
While multifamily owners, developers, and property managers collectively braced for severe drops in rent growth, construction starts, project completions, and availability of capital amid the COVID-19 pandemic, the drastic declines never materialized.
Rent growth did take a step back in select markets, especially in "high-cost gateway" metros like San Jose (-13.7%) and San Francisco (-9.4%), as renters continued to leave pricey urban neighborhoods for less-dense, cheaper suburban areas.
But on the flip side, "many tertiary and tech hub markets have benefited from migration out of the gateways," wrote the authors of the Yardi Matrix report. Secondary and tech markets like the Inland Empire, Sacramento, Tampa, and Las Vegas all saw solid rent growth in 2020.
Multifamily construction pipeline for 2021
Other than the temporary shutdowns of work sites during the pandemic, construction work on multifamily housing developments continued to hum along through 2020 and into 2021. In all, 285,000 multifamily units were delivered throughout U.S. markets in 2020, down about 7% from 2019, but not nearly as severe a drop as many had predicted.
According to Yardi Matrix, the multifamily sector has a "robust pipeline" of new projects, with some 765,000 units in some stage of construction as of early 2021. This "should keep deliveries above that 300,000 mark for the next few years." The firm projects 327,718 units will be delivered in 2021.
Here are the top 25 multifamily markets for 2021 (total number of construction completions, % growth in completions YOY):
1. Dallas: 22,909 completions (+12.1% YOY)
2. Miami: 16,262 (+66.3%)
3. Washington, D.C.: 14,541 (+50.5%)
4. Houston: 11,500 (-3.1%)
5. Los Angeles: 11,296 (+16.5%)
6. Atlanta: 10,939 (+9.7%)
7. Austin: 10,301 (-10.0%)
8. Seattle: 9,816 (+29.9%)
9. Phoenix: 9,334 (+13.6%)
10. Denver: 8,653 (-29.7%)
11. Boston: 8,449 (+20.8%)
12. Chicago: 7,797 (+0.8%)
13. New York City: 7,335 (+24.2%)
14. San Francisco: 7,166 (+64.8%)
15. Twin Cities: 6,760 (+4.9%)
16. Charlotte: 6,692 (+55.3%)
17. Orlando: 6,662 (+21.5%)
18. Philadelphia: 6,071 (+27.7%)
19. Nashville: 5,457 (+41.1%)
20. Tampa–St. Petersburg: 5,103 (+20.1%)
21. San Antonio: 4,960 (-6.5%)
22. New Jersey–Northern: 4,955 (+29.9%)
23. Salt Lake City: 4,633 (-0.6%)
24. Louisville: 4,484 (+215.6%)
25. White Plains: 4,464 (+199.6%)
DOWNLOAD THE FULL REPORT
Related Stories
Green | May 16, 2016
Development team picked for largest Passive House project in North America
The 24-story curved building would be 70% more efficient than comparable housing in New York City.
Multifamily Housing | May 12, 2016
Micro apartment complex planned for artsy Austin district
Indie Apartments will consist of 139 one- and two-bedroom units at 350- and 520-sf each.
Mixed-Use | May 1, 2016
A man-made lagoon with a Bellagio-like fountain will be the highlight of a mixed-use project outside Dallas
Construction will soon begin on housing, retail, and office spaces.
Senior Living Design | Apr 14, 2016
Creating a home for eldercare using the ‘Green House’ design concept
VOA Associates’ Douglas King offers design considerations in implementing the Green House concept in eldercare for continuing care retirement communities.
Multifamily Housing | Apr 7, 2016
Multifamily and Specialized Housing projects honored in 2016 AIA Housing Awards
A San Francisco low-income mixed-use complex, a Los Angeles homeless veterans housing facility, and a series of student residential buildings at UMass were among the winners.
Multifamily Housing | Mar 10, 2016
Access and energy control app clicks with student housing developers and managers
Ease of installation is one of StratIS’s selling features.
Multifamily Housing | Mar 7, 2016
Multifamily developers face steep costs for violating Fair Housing Act
Designers without previous multifamily experience could overlook key provisions.
High-rise Construction | Mar 3, 2016
HOK’s Hertsmere House will be Western Europe’s tallest residential tower
Recently approved for development, the 67-story building will have more than 900 units.
University Buildings | Feb 29, 2016
4 factors driving the student housing market
In the hyper-competitive higher education sector, colleges and universities view residence halls as extensions of their academic brands, both on and off campus.
Multifamily Housing | Feb 24, 2016
Senior housing sector experiences record-setting year, says CBRE
Senior housing occupancy is at its highest level since 2007, and 2015 was a record year for sales and institutional transactions, according to CBRE.
