An Analysis by Victor Calanog, PhD
FIRST QUARTER FUNDAMENTALS HAVE YET TO REFLECT DISTRESS
Vacancies remained unchanged relative to year-end 2019, anchored at 4.7%. Absorption was just under 25,000 units, suggesting that most landlords and property managers that brought new units to market did not have problems finding tenants.
Apartment Vacancy & Rent Growth
Source: Moody’s Analytics REIS
There is much uncertainty around how long the economic shutdown will last, but current federal government guidelines has the US essentially on lockdown at least until April 30th. Moody’s Analytics estimates that state shutdowns have taken close to 30% of the economy offline. If current economic forecasts come to pass, second quarter US GDP may fall by as much as 30% (annualized). That will be a record decline – three times the previous record from 1958.
Victor Calanog, PhD CRE® is the Head of Commercial Real Estate Economics at Moody’s Analytics REIS. He and his team of economists and analysts are responsible for the firm’s market forecasting, valuation, and real estate portfolio analytics services. He holds a PhD in Applied Economics and Management Science, trained by a dissertation committee composed of faculty from the Wharton School of the University of Pennsylvania and Harvard Business School.