Richmond Multifamily Report – Summer 2020
In spite of the COVID-19 pandemic, rent growth managed to outperform the U.S. average this spring.
Richmond rent evolution, click to enlarge
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.
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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.
Richmond sales volume and number of properties sold, click to enlarge
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.
