{"id":2259,"date":"2021-11-03T15:00:06","date_gmt":"2021-11-03T15:00:06","guid":{"rendered":"https:\/\/www.yardimatrix.com\/blog\/?p=2259"},"modified":"2024-02-06T10:57:14","modified_gmt":"2024-02-06T10:57:14","slug":"large-coastal-metros-revive-amid-surge-in-multifamily-demand","status":"publish","type":"post","link":"https:\/\/www.yardimatrix.com\/blog\/large-coastal-metros-revive-amid-surge-in-multifamily-demand\/","title":{"rendered":"Large Coastal Metros Revive Amid Surge in Multifamily Demand"},"content":{"rendered":"<p>The early stages of the COVID-19 pandemic produced an exodus of renters from gateway markets, prompting questions about their long-term future. While those questions remain unresolved, prospects for urban markets brightened in 2021 as apartment demand returned with the reopening of cities.<\/p>\n<p>The gateway rebound comes amid record-setting demand nationally, as multifamily established a new annual high in absorption in only nine months. Through the first three quarters in 2021, 475,000 apartment units were absorbed in the U.S., already topping 2018\u2019s single-year high of 370,000 recorded by Matrix. At least 100,000 units have been absorbed in each of the last four quarters, which is also a first.<\/p>\n<p>The absorption numbers explain the<a href=\"https:\/\/www.yardimatrix.com\/blog\/red-hot-multifamily-market-set-to-be-tested\/\"><strong> industry\u2019s recent extraordinary rent performance<\/strong><\/a>. Asking rents nationally were up 11.4 percent year-over-year through September, while the occupancy rate of stabilized properties rose 110 basis points year-over-year to 95.9 percent as of August, per Matrix data on 144 markets.<\/p>\n<p style=\"text-align: center;\"><strong>Absorption as % of Stock by Market Size<\/strong><\/p>\n<figure id=\"attachment_2262\" aria-describedby=\"caption-attachment-2262\" style=\"width: 1351px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2262 size-full\" src=\"https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/Captureg.png\" alt=\"Absorption as % of Stock by Market Size\" width=\"1351\" height=\"628\" srcset=\"https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/Captureg.png 1351w, https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/Captureg.png?resize=300,139 300w, https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/Captureg.png?resize=768,357 768w, https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/Captureg.png?resize=1024,476 1024w, https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/Captureg.png?resize=990,460 990w, https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/Captureg.png?resize=1320,614 1320w\" sizes=\"auto, (max-width: 1351px) 100vw, 1351px\" \/><figcaption id=\"caption-attachment-2262\" class=\"wp-caption-text\">Source: Yardi Matrix<\/figcaption><\/figure>\n<p>Robust multifamily absorption is driven by a confluence of factors, including robust economic growth, the decline in unemployment, pent-up demand coming out of the pandemic, and strong household savings. Plus, there remains a long-term shortage of housing supply, as new construction was stifled for several years coming out of the Great Recession, and single-family home prices have soared.<\/p>\n<p>Arguably, the most notable part of the 2021 landscape is the rebound in gateway markets, which are on the verge of a \u201cworst-to-first\u201d turnaround. Gateway metros (which Yardi defines as New York City, Boston, Washington, D.C., Miami, Chicago, Los Angeles and San Francisco) combined posted negative (-7,000) absorption in 2020.<\/p>\n<p>Through three quarters in 2021, gateway metros have absorbed some 108,000 units. As a percentage of stock, that amounts to 3.8%, which is the highest rate among metros ranked by market size. Secondary markets absorbed 3.7% of stock, while tertiary metros trailed at 2.2% of stock. In 2020, gateway metro absorption was -0.3%, compared to 1.9% for the entire U.S.<\/p>\n<p>During the pandemic, gateway markets lost Millennial renters with children looking for housing with more space and\/or better schools, renters who work remotely looking for lower-cost housing and those seeking a more suburban or rural lifestyle. Now units are being backfilled, largely by young workers seeking the experience of city life and downsizing retirees.<\/p>\n<p>Regionally, the Southeast continues to attract the most renters, with 155,000 units absorbed year-to-date through the third quarter, or 3.7% of stock. Metros in the West (101,000, 3.3% of stock) and Southwest (98,000, 3.5% of stock) also are attracting a high number of households. The Northeast (60,000, 2.7% of stock) and Midwest (59,000, 2.5% of stock) trail in total absorption.<\/p>\n<p>Multifamily has benefited from a confluence of factors to produce outstanding fundamental performance in 2021. Some of those factors, such as the stimulus-fueled GDP growth and pent-up demand after a year spent in quarantine, are not sustainable. Other factors that involve evolving social and demographic forces are likely to drive demand for years to come.<\/p>\n<p>Read the full <a href=\"https:\/\/www.yardimatrix.com\/publications\/download\/file\/1355-MatrixBulletin-AbsorptionPaper-October2021?utm_source=Matrix-Blog&amp;utm_medium=Social\"><strong>Matrix Bulletin-Absorption Paper-October 2021<\/strong><\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The early stages of the COVID-19 pandemic produced an exodus of renters from gateway markets, prompting questions about their long-term future. While those questions remain unresolved, prospects for urban markets brightened in 2021 as apartment demand returned with the reopening of cities. The gateway rebound comes amid record-setting demand nationally, as multifamily established a new [&hellip;]<\/p>\n","protected":false},"author":463,"featured_media":2260,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[24,23],"tags":[221],"class_list":["post-2259","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-matrix-research","category-studies-and-guides","tag-multifamily-outlook-2021"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Large Coastal Metros Revive Amid Surge in Multifamily Demand - Yardi Matrix Blog<\/title>\n<meta name=\"description\" content=\"The early stages of the COVID-19 pandemic produced an exodus of renters from gateway markets, prompting questions about their long-term future.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.yardimatrix.com\/blog\/large-coastal-metros-revive-amid-surge-in-multifamily-demand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Large Coastal Metros Revive Amid Surge in Multifamily Demand\" \/>\n<meta property=\"og:description\" content=\"The early stages of the COVID-19 pandemic produced an exodus of renters from gateway markets, prompting questions about their long-term future.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.yardimatrix.com\/blog\/large-coastal-metros-revive-amid-surge-in-multifamily-demand\/\" \/>\n<meta property=\"og:site_name\" content=\"Yardi Matrix Blog\" \/>\n<meta property=\"article:published_time\" content=\"2021-11-03T15:00:06+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-02-06T10:57:14+00:00\" \/>\n<meta name=\"author\" content=\"Paul Fiorilla\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/michael-discenza-5omwAMDxmkU-unsplash-e1635951420150.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Paul Fiorilla\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Large Coastal Metros Revive Amid Surge in Multifamily Demand - 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Before that, he covered real estate capital markets and CMBS at Commercial Mortgage Alert.","url":"https:\/\/www.yardimatrix.com\/blog\/author\/paul-fiorilla\/"}]}},"jetpack_featured_media_url":"https:\/\/www.yardimatrix.com\/blog\/wp-content\/uploads\/sites\/39\/2021\/11\/michael-discenza-5omwAMDxmkU-unsplash-e1635951420150.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/posts\/2259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/users\/463"}],"replies":[{"embeddable":true,"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/comments?post=2259"}],"version-history":[{"count":3,"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/posts\/2259\/revisions"}],"predecessor-version":[{"id":5605,"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/posts\/2259\/revisions\/5605"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/media\/2260"}],"wp:attachment":[{"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/media?parent=2259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/categories?post=2259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.yardimatrix.com\/blog\/wp-json\/wp\/v2\/tags?post=2259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}