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 15, 2018
Memphis construction: Can this city become the next Austin?
One local design firm is trying to make it happen.
Multifamily Housing | Aug 8, 2018
Flyin' high: Humphreys & Partners Architects keeps soaring to new heights
HPA, which reported $78.2 million in multifamily design fees in 2017, ranks as the nation’s largest multifamily design firm.
Multifamily Housing | Aug 7, 2018
Even after redevelopment, the iconic 'Chicago Tribune' sign will remain at 435 N. Michigan Ave.
The newspaper and the building's new owners reached a settlement.
Multifamily Housing | Aug 2, 2018
The recipe for bicycle kitchens
Bike storage and workshop spaces are rapidly turning into full-service social amenity spaces in multifamily projects.
Multifamily Housing | Aug 2, 2018
Bicycle kitchens give cyclists their very own amenity space
Bike storage and workshop spaces are rapidly turning into full-service social amenity spaces in multifamily projects.
Multifamily Housing | Jul 31, 2018
Put air rights to better use
If your school district is building a new school, build housing in the air space above it and put lower-paid public employees at the front of the line to live there.
Multifamily Housing | Jul 25, 2018
Multifamily market trends 2018: Demographic shifts reshape the residential landscape
Changing generational preferences are prompting multifamily developers to re-strategize.
Multifamily Housing | Jul 19, 2018
Multifamily market stays hot in first half of 2018
The average rent grew by $12 in June, to an all-time high of $1,405, according to a survey of 127 markets by Yardi Matrix.
Multifamily Housing | Jul 18, 2018
First apartment building funded by Massachusetts’ workforce housing subsidy program opens
The transit-oriented Gateway North Residences is centrally located in Lynn, Mass.
Codes and Standards | Jul 17, 2018
NIMBYism, generational divide threaten plan for net-zero village in St. Paul, Minn.
The ambitious redevelopment proposal for a former Ford automotive plant creates tension.