Richmond Multifamily Report – Fall 2021
Despite record levels of development, fundamentals are holding strong, at least for now.
Richmond’s multifamily market has held strong after weathering last year’s economic disruptions. Rents were up by 1.7 percent on a trailing three-month (T3) basis to $1,325 as of August, on par with the national rate of growth. At the same time, affordability has drawn additional demand as the metro’s population expands. While Lifestyle rents grew fastest, up 2.3 percent on a T3 basis to $1,584, the working-class Renter-by-Necessity segment also held positive, up 1.4 percent, to $1,184, during the same period.
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The metro added 61,500 jobs in the 12 months ending in June, with increases in nearly all sectors. Unemployment levels continued to trend downward, falling to 4.4 percent in July—100 basis points less than the national figure. Future growth is on the horizon, with several employers announcing major expansion plans earlier this year. What’s more, Virginia ended the fiscal year with a $2.6 billion budget surplus, which could spur additional growth.
Multifamily development has taken off, with close to 11,500 units under construction at the end of August. Deliveries this year are anticipated to hit levels not seen in more than three decades. Investment has also picked up, with $789 million in transactions closed year-to-date through August, more than double the volume of the same period last year. Sales prices averaged $133,973 per unit, nearly one-quarter less than the national figure.