Richmond Multifamily Report – Summer 2020
In spite of the COVID-19 pandemic, rent growth managed to outperform the U.S. average this spring.
Despite the coronavirus pandemic, steady fundamentals kept the multifamily market relatively healthy in the Richmond-Hampton Roads area during the first five months of 2020. Rent growth remained encouraging, boosted by low inventory and steady upscale demand. The average rent rose 0.1 percent on a trailing three-month basis through May to $1,127. The national average slid 0.2 percent to $1,460 during the same period.
With government and professional and business services as its largest employment sectors, Richmond is relatively well prepared to weather COVID-19’s impact. Nonetheless, five employment sectors contracted on a year-over-year basis through March, with education and health services registering the most job losses. Yet local firm Phlow Corp. received a four-year, $354 million contract to manufacture pharmaceutical ingredients needed to treat the virus. Other research companies and the Virginia Commonwealth University are working to develop antibody tests.
Following 2019’s $1.4 billion cycle peak in multifamily deals, sales nearly stalled after the COVID-19 crisis reached the U.S. Just $189 million in apartments traded in the first five months of 2020 for a per-unit price that slid 8.4 percent to $103,530. Although construction was deemed an essential service, developers brought only 207 units online and had another 7,607 units underway as of May.