St. Louis Multifamily Report – Summer 2020
Unlike most coastal gateways, the metro has registered rent growth since the COVID-19 outbreak hit the U.S.
With a slowly dwindling population and job performance below the national average, St. Louis’ multifamily market has posted outstanding performance during the COVID-19 outbreak. Rent expansion remained strong, up 0.2 percent on a trailing three-month basis through June. The average rate reached $982, well below the $1,457 U.S. figure. Still, following last year’s substantial stock expansion, the occupancy rate in stabilized properties slid to 93.6 percent as of May, down 90 basis points in one year.
The metro’s job market turned negative—down 3.4 percent in the 12 months ending in May—with leisure and hospitality shrinking by nearly 40 percent. The unemployment rate, which stood at a tight 3.3 percent in February, rose to 11.0 percent in April and 11.3 percent in May. Since the coronavirus outbreak, more than 490,000 Missourians have filed unemployment claims. The reopening of businesses resulted in a spike in the number of coronavirus cases, which prompted local officials to announce new capacity restrictions for a four-week period.
Following last year’s cycle peak, when more than 2,900 units came online, the inventory expansion plummeted—just 253 units were delivered in the first half of 2020. Meanwhile, transaction volume totaled $249 million for an average per-unit price that rose by 74.5 percent. The volume was nearly on par with the same period last year, but most activity was registered in the first quarter.