Q2 multifamily demand falls due to COVID-19 economic downturn

Usually the strongest quarter of the year for multifamily demand, second quarter 2020 saw net absorption fall to just 21,100 units — the lowest second quarter level since 2009, reported CBRE.

The vacancy rate rose by 30 basis points quarter-over-quarter to 4.6 percent and average monthly rent fell by 1.4 percent to $1,720. Despite the low level of absorption, the multifamily market held up better than expected in the second quarter. Given the magnitude of the job losses, the rise in vacancy and drop in rents was relatively modest, as federal and state stimulus programs, including enhanced unemployment benefits, helped financially stressed apartment residents make their rent payments.

Recently, CBRE released its global real estate market outlook report, stating multifamily sectors will have the quickest comeback, while other sectors will take longer to recover.