Total multifamily inventory is closing in on 20 million units, as of the end of the first quarter, after climbing 2.9% with the addition of roughly 577,000 new ones over the past year, according to Berkadia’s national multifamily market report for the first quarter. Net absorption over the trailing four quarters was 707,871 units, more than double the prior year’s total absorption.
Elevated housing demand combined with enduring renewals led to a 90-basis-point rise in apartment occupancy to 95% during the quarter, according to the report.
Just over 900,000 households were formed in the year ending in the first quarter, a 0.7% increase, bringing the total in the U.S. to nearly 132 million.
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The market was aided by a 1.2% year-over-year increase in employment, or 1.9 million new jobs during the past 12 months. About 160 million people are currently employed across the country.
Effective rents were up 1.1% year-over-year to $1,827, a $19 increase.
Class A rents were roughly $2,400 per month; Class B's were near $1,800 and Class C's were about $1,500.
Berkadia’s national multifamily report included detailed information on dozens of markets. Occupancy in New York reached 97.4%, up 70 bps year-over-year. The market benefited from a 0.7% increase in households and annual job growth of 1.1% as it absorbed 34,206 units during the fourth quarter. Its total multifamily inventory is just under 2 million units.
In Washington, D.C., occupancy for the first quarter was 95.8%, up 120 bps from 12 months prior. Effective rent in the market stood at $2,208, an increase of $79 or 3.7% year-over-year. The market absorbed 22,440 units for the 12 months ending in March.
New inventory in Orlando was up 4.5%, with the addition of 12,636 units. The market absorbed 13,833 units during the past year and occupancy was up 80 basis points to 94.4%, but effective rent dropped 1.1% to $1,734.
Effective rents were also down in Dallas for the first quarter to $1,485, a 2.1% decrease. The market received 43,100 units during the past 12 months and absorbed more than 48,200 units. Occupancy in the city stood at 93.4% to end the quarter.
In Los Angeles, occupancy was up 60 bps to 95.5% at the end of the first quarter. The effective rent in the market was nearly $2,800, a $20 increase.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
