Net absorption in the apartment market was positive 14,298 units in the quarter as tenants continued to lease space. New construction was 24,409 units, down from an average of 51,100 new units completed per quarter in 2019. These relatively low numbers kept the vacancy rate unchanged at 4.8%. Both the national average asking rent and effective rent, which nets out landlord concessions, decreased 0.4% in the quarter but increased 1.6% and 1.7%, respectively, over the year.
Apartment: National Vacancy & Rent Trends
Source: Moody’s Analytics REIS
Statistics by Metro
In the apartment market, vacancy rate changes varied from -0.3% (in Columbia, Albuquerque, and Oklahoma City) to +0.5% (in Miami, Syracuse, and Richmond). However, 30 metros incurred an effective rent decline in the quarter led by San Francisco where rents dropped 3.4%. Other metros with significant declines were Palm Beach (-2.1%), Washington, D.C. (-1.6%), Ventura County (-1.5%) and Greenville, SC (-1.4%). Metros with the highest rent increases include Lexington (+1.8%), Memphis (+1.2%), Richmond (+1.0%) and San Bernardino/Riverside +1.0%).
The second quarter statistics clearly show that property owners have yet to feel the full impact of the pandemic. In fact, demand for apartments could hold steady in most metros as the housing sales market will likely bear the brunt of the downturn that the pandemic has incurred.
Note: Preliminary trends are subject to revision.
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