Richmond Multifamily Report – Fall 2020
While transaction activity nearly halted, rents continued to improve, outperforming the U.S average.
This year was forecast to be a strong one for Richmond’s economy and multifamily market, following steady demand in 2019 and the prospect of above-average rent gains. Indeed, while fundamentals took a hit as a result of the health crisis, rents were still up 0.6 percent on a trailing three-month basis through September, bucking nationwide trends. What’s more, the metro’s occupancy rate in stabilized assets rose 0.2 percent over 12 months, to 95.6 percent as of August.
Richmond’s employment pool contracted by more than 90,000 positions in the 12 months ending in July—down 5.3 percent —with all sectors recording drops. While many of the national job losses reported at the beginning of the pandemic consisted of temporary layoffs and furloughs, in September, the national number of workers who permanently lost their jobs spiked to 3.8 million. That’s almost twice as many as the number in April.
Almost 4,000 of the 9,578 units under development as of September are slated to reach completion as early as year-end. However, due to supply chain disruptions and economic and health factors, some projects will inevitably register delays. Meanwhile, transaction volume over the first nine months of 2020 dropped almost 75 percent compared to the same period last year, to $256.1 million.