Raleigh Multifamily Report – Spring 2020
- Jul 01, 2020
The Triangle kicked off 2020 with strong fundamentals, but what was on track to be another dynamic year has shifted since the outbreak of the COVID-19 crisis. Rents contracted by 10 basis points on a trailing three-month basis as of April, in what was supposed to be the beginning of the prime leasing season.
The metro gained 16,800 jobs in the 12 months ending in March—a 1.8 percent uptick and 40 basis points above the U.S. rate. The early effects of the health crisis, however, began to unfold in the last two weeks of the first quarter. Retail, leisure and hospitality were immediately hit by social distancing measures and unemployment claims across the state had skyrocketed by May. GE Aviation, the Sheraton Imperial Hotel and Convention Center in Durham, and Cinemark Raleigh Grande were some of the many employers laying off or furloughing thousands of workers. On a positive note, most nonessential businesses were allowed to partially reopen on May 8 as part of the first phase to ease COVID-19 restrictions.
Almost $480 million in assets traded in the Triangle in the first four months of 2020, a slight slowdown from last year. While the overall economic effects of COVID-19 are yet to be quantified, the market has been resilient through other crises. However, with significant completions in the past six years and the current downturn still unfolding, we expect the metro’s average rent to drop in 2020.