Multifamily Outlook

Continuing fallout from COVID-19

By Leah Etling on May 11, 2020 in Matrix, News

Yardi Matrix continued its series of comprehensive market impact webinars on May 6 with an in-depth look at the state of the multifamily industry, presented by Jeff Adler, vice president of Matrix.

“We are just beginning to see some of the ripple effects (on multifamily), and now the discussion has shifted to how we recover and move forward,” stated Adler at the outset of the session. Nearly 1100 real estate professionals tuned in for the 90-minute session.

A similar presentation with a focus on the commercial real estate sector is set for Wednesday, May 13. You can register here. Attendees report that the Matrix webinars are invaluable for keeping a finger on the pulse of the rapid changes that continue to impact the industry.

Here are some of the key takeaways from the multifamily impact webinar. Listen to the full presentation to see data points and comprehensive slides.

• So far, the multifamily industry is holding up well. April rent collections were excellent, only off a few single digit points from prior months, said Adler. It’s expected that trend will continue at least until August.
• Leasing season has resumed and many properties with availability are seeing more interest than expected, according to anecdotal reports from industry contacts. Data from Yardi’s RentCafe online leasing service shows a marked uptick in views of online apartment listings over the last month.
• The economic recovery is expected to be partial and slower in some states than others. This will impact all industries, and multifamily will likely continue to see household consolidation as renters move in with friends or family members to try to keep costs down.
• For new leases, concessions offered by owners and managers will be an important indicator of market performance trends going forward.
• Population trends will involve renters moving toward the south and the west, as well as leaving dense urban environments for suburban spaces with more space and larger units. Work from home requirements are a factor in this trend, as is lifestyle and affordability.
• Capacity considerations and ongoing social distancing requirements are an important factor for all businesses reopening, including apartment buildings where amenities like pools and gyms have likely been closed.
• Student housing faces major implications, including the likelihood that international students may not return for the 2020-2021 school year. Incoming freshmen also face a tough decision whether to attend college or defer. However, there could be positive impact for private student housing, which is able to offer more space to student residents than on-campus dorms.

“We’re not done (with economic pain) yet. But I do think the immediate first wave of pain is behind us,” Adler concluded. “We’re looking at an ongoing, gradual recovery that will start in the next 30 days. But we have a very long road back.”

The ongoing series of Yardi education opportunities for real estate professionals will continue this Tuesday, May 12, with a presentation by Dhar Sawh, industry principal, focused on Operational Strategies for Business Continuity and Recovery in Residential Real Estate. The session will guide you through operational considerations and strategies that will aid with day-to-day operations and recovery after the crisis subsides. Register here.