Washington, DC, Multifamily Report – Summer 2021
Rents across the metro are now growing at an accelerated pace.
The Washington, D.C., multifamily market has faced a number of challenges over the past year, and, despite signs of a broader economic recovery, the metro will likely take some time to fully recoup. At the end of May, rents averaged $1,796, up 0.6 percent on a trailing three-month (T3) basis, more than 25 percent higher than the national average. While Lifestyle and working-class Renter-by-Necessity figures grew 0.7 percent and 0.5 percent, respectively, the market’s primarily upscale development pipeline of nearly 43,000 units could compress rent expansion as new inventory comes online.
The metro’s economy began to show signs of recovery, though job losses totaled 188,300, or a 5.6 percent drop, for the year ending in March. The metro’s beleaguered leisure and hospitality sector could face a long recovery period while more resilient sectors with government and office-using jobs have already begun to signal a return to normal. Washington, D.C.’s unemployment rate fell to 4.9 percent in April, continuing its downward path from the nearly 10 percent reported a year earlier at the onset of the health crisis.
Multifamily transactions through May totaled $1.6 billion, a slight decrease compared to the same period in 2020. Investors focused on RBN assets, which accounted for more than three-fifths of total volume. Rents should grow at a moderate 1.5 percent rate this year.