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
Industry Research | Feb 22, 2016
8 of the most interesting trends from Gensler’s Design Forecast 2016
Technology is running wild in Gensler’s 2016 forecast, as things like virtual reality, "smart" buildings and products, and fully connected online and offline worlds are making their presence felt throughout many of the future's top trends.
Multifamily Housing | Feb 10, 2016
Miami review board recommends approval for Arquitectonica’s top-heavy condo tower
The 57-story Elysee Miami will offer residents impeccable views and plenty of amenities.
Multifamily Housing | Feb 5, 2016
Design guidelines for retail space in NYC affordable housing projects released
Aimed at designing efficient, flexible ground-floor space.
Multifamily Housing | Feb 2, 2016
10 top bathroom design trends for 2016
Floating vanities, tricked-out showers, and freestanding tubs highlight the top bathroom design trends, according to a survey of kitchen and bath design professionals by the National Kitchen and Bath Association.
Multifamily Housing | Feb 1, 2016
Top 10 kitchen design trends for 2016
Charging stations, built-in coffeemakers, and pet stations—these are among the top kitchen design trends for the coming year, according to a new survey of kitchen and bath designers by the National Kitchen & Bath Association.
Codes and Standards | Jan 22, 2016
Treasury Dept. will start crackdown on illicit money in luxury real estate
The move is expected to impact high-end condo development.
| Jan 14, 2016
How to succeed with EIFS: exterior insulation and finish systems
This AIA CES Discovery course discusses the six elements of an EIFS wall assembly; common EIFS failures and how to prevent them; and EIFS and sustainability.
Multifamily Housing | Jan 8, 2016
Manager of New York’s first micro-unit development inks pact with ‘personal butler’ service
The co-living platform Ollie is leasing its initial building, in New York, with housekeeping and grocery shopping available via Hello Alfred.
Urban Planning | Jan 4, 2016
The next boomtown? Construction and redevelopment sizzle in San Diego
The city's emission-reduction plan could drive influx into downtown
Multifamily Housing | Dec 23, 2015
Student housing developer broadens its reach into multifamily
Aspen Heights Partners evaluates seven metros for its initial projects.