CBRE Econometric Advisors (CBRE EA) projects multifamily fundamentals will take a sharp downturn before a rebound beginning in the fourth quarter 2020 for vacancy and first quarter 2021 for rents. It is not like the V-shaped recovery expected for the broader economy, but still quite promising.
The multifamily outlook is based on CBRE’s economic forecast of a 4.3 percent contraction in GDP this year and a loss of 14 million jobs. If the outlook weakens, the multifamily downturn could be worse than currently expected and the recovery delayed.
CBRE EA projects multifamily vacancy to rise 2.7 percentage points to 6.3 percent in the third quarter 2020 from the most recent low of 3.6 percent in the third quarter 2019.
Vacancy should begin to decrease in the fourth quarter 2020 and return to its former low levels by the third quarter 2021—a relatively rapid recovery phase.
Rents are expected to decline through 2020, with lower rental rates for new leases and
