Washington, DC, Multifamily Report – Summer 2021
Rents across the metro are now growing at an accelerated pace.
Washington, D.C. rent evolution, click to enlarge
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.
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Washington, D.C. sales volume and number of properties sold, click to enlarge
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.
