Multifamily Completions Tumble, Rents Reaccelerate

The Mark, a 150-unit garden-style apartment complex, sold for $44 million or $293,000 per unit.

HAYWARD, CA—The robust Bay Area metro, underpinned by tremendous growth in the tech, semiconductor and biotech industries, has generated unemployment rates matched only by the late 1990s. Household formation has surged, yet a lack of housing, primarily multifamily units, has pushed vacancy to extremely low levels, according to a fourth quarter multifamily report by Marcus & Millichap.

Additionally, household bundling has become increasingly prevalent, a trendset that will likely accelerate as development slides roughly 30% region-wide. As construction falls, rental rates have stabilized and reaccelerated as tenants vie for the limited number of remaining apartments still available. Rent growth will be most pronounced in commuter locations in second- and third-tier suburbs, where the rental rate remains below the metro average.