Despite a disruptive pandemic, investor demand for multifamily real estate was strong in 2020, according to a newly released Yardi Matrix Bulletin.
Around 252,000 apartment units were absorbed last year. That’s about 1.7% of total market stock and down 12% from the 286,300 apartments purchased in 2019.
“Considering the economic and social calamity that befell the U.S., in many respects due to COVID-19, the fact that demand held up as well as it did is a relief for the apartment industry,” say Matrix analysts.
Net absorption was strongest in 25 of the 30 largest metros, which accounted for 158,300 units absorbed. Dallas, Atlanta and Denver saw the highest absorption rates.
Negative absorption was centralized in key gateway markets hit hard by COVID-19, which also struggled with renter demand and average rents. The worst performers were the Bay Area and New York City, which combined for -22,100 units absorbed in 2020.
Overall, high-cost gateway metros had net absorption of -0.3% (-7,600 units). Demand was better in secondary (154,100 units, or 2.3% of total stock) and tertiary (96,200 units, or 2.0% of stock) markets.
On a regional level, renters continued to flock to the Southeast (96,700 units absorbed, or 2.4% of total stock), the Southwest (56,800 units, 2.1% of stock) and the West (57,100 units, 1.9% of stock). Meanwhile, demand was slightly positive in the Midwest (27,100 units, 1.1% of stock) and the Northeast (4,900 units, 0.2% of stock).
Here are the top 10 markets based on net multifamily absorption in 2020:
1. Dallas: 19,233 units; 2.4% net absorption of total stock; 93.8% occupancy rate in Dec. 2020
2. Atlanta: 12,864; 2.8%; 94.7%
3. Denver: 11,552; 4.0%; 94.5%
4. Phoenix: 10,082; 3.2%; 95.5%
5. Houston: 8,377; 1.3%; 92.1%
6. Austin, Texas: 7,893; 3.1%; 93.3%
7. Miami: 7,721; 2.5%; 94.4%
8. Tampa, Fla.: 6,196; 2.8%; 95.4%
9. Charlotte, N.C.: 6,073; 3.3%; 95.1%
10. San Antonio: 5,836; 2.8%; 93.0%
Related Stories
Multifamily Housing | Aug 9, 2021
Eden House residential development will rise 16 stories in Nashville
Gresham Smith designed the project.
| Aug 8, 2021
Furniture installation lends a 'hospitality feel' to a new apartment community in Colorado Springs
Furniture Solutions Group procured the furniture, window treatments, artwork, and accessories for the Mae on Cascade apartments in Colorado Springs.
Multifamily Housing | Aug 1, 2021
An aging public housing complex in L.A. is being redeveloped
The city and county are grappling with an escalating homeless crisis
Multifamily Housing | Jul 30, 2021
Multifamily housing for a post-COVID world
A trio of multifamily design experts presents concepts for post-pandemic apartment developments.
Multifamily Housing | Jul 28, 2021
158-unit multifamily complex set to begin construction in D.C.’s Logan Circle
Hickok Cole is the project architect.
Multifamily Housing | Jul 28, 2021
158-unit multifamily complex set to begin construction in D.C.’s Logan Circle
Hickok Cole is the project architect.
Multifamily Housing | Jul 27, 2021
New report predicts double-digit multifamily delivery rebound in 2021
Yardi Matrix also foresees rent inflation “persisting” in some metros for months ahead.
Multifamily Housing | Jul 27, 2021
Call for submissions: ‘Affordable Housing Projects' Cover Story
MULTIFAMILY Design+Construction is looking for the best new "affordable housing" communities for the Fall Issue 2021.
Multifamily Housing | Jul 23, 2021
26-story apartment tower tops out in Silver Spring, Md.
The building will be the tallest in Silver Spring.
Market Data | Jul 20, 2021
Multifamily proposal activity maintains sizzling pace in Q2
Condos hit record high as all multifamily properties benefit from recovery.