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
Plumbing | Mar 13, 2020
Pioneer Industries launches new website
Pioneer Industries launches new website
Multifamily Housing | Mar 5, 2020
The Aviator apartment community opens near Henderson Executive Airport
The community is inspired by antique airplane designs.
Building Materials | Mar 3, 2020
84 Lumber President Maggie Hardy Knox receives Career Achievement Award
Maggie Hardy Knox, President of 84 Lumber and Nemacolin Woodlands Resort, to receive Career Achievement Award.
Multifamily Housing | Feb 26, 2020
School districts in California are stepping in to provide affordable housing for faculty and staff
One high school district in Daly City has broken ground on 122-apartment building.
Multifamily Housing | Feb 23, 2020
A post-storm Puerto Rico reconsiders how and what to rebuild
Federal help means tougher code enforcement. And will this island of homeowners embrace renting?
| Feb 17, 2020
Interior designers weigh in on outdoor kitchens
Designers weigh in on outdoor kitchens
Multifamily Housing | Feb 12, 2020
4 products for your next multifamily project
These new products can help improve any new multifamily project.