This Week in Multifamily: Operators Cautiously Optimistic

Several months into the COVID-19 pandemic and apartment operators seem to be resuming some sense of normalcy in operations. Rent declines in executed leases seen in April and May have disappeared in most major markets, June rent collections match year-ago figures and student housing concessions are tracking 2019 levels. But all this comes as millions of Americans are still out of work and unemployment benefits from the CARES Act are scheduled to expire.

Catch up on this week in multifamily news here.

Executed Rents Pull Even With 2019 Levels

In the third week of June, executed rents on new leases ticked up a mild 0.08% from last year. That’s a negligible amount, but it bodes well for already rebounding fundamentals. It was only a few short weeks ago that executed rents were being cut by more than 6% nationally.

Reopening Apartment Operations

As economies begin to gingerly reopen, so do apartment operations. RealPage Deputy Chief Economist Jay Parsons talked to operations experts to learn how they’re tackling mounting maintenance requests, reopening amenity spaces, offering virtual resident events and approaching marketing and leasing in this “new normal” environment.

Rent Collections Match Year-Ago Figures

Of renters living in professionally managed apartments, over 92% paid rent by June 20, according to the National Multifamily Housing Council. That’s figure matches the rate seen in June 2019.

Student Housing Concessions No Cause for Concern

Student housing concessions, typically a trailing indicator of market health, also essentially match last year’s rates. In May 2020, about one-quarter of the RealPage 175 universities were offering concessions, which tracks in line with the 2019 level. Likewise, the value of concessions being offered is in line with year-ago rates.

Large Markets Account for Steepest Job Losses

While the U.S. economy recouped some previously lost jobs in May, gains during the month did not make up for the steep losses recorded in March and April. Over 40 of the nation’s largest 150 apartment markets lost at least 100,000 jobs in the year-ending May. The deepest declines were felt in the large gateway markets like New York and Los Angeles.

For further reading on COVID-19 and the multifamily industry, check out these articles.

Total of Those Receiving Unemployment Benefits Falls Below 20 Million from CNBC
U.S. Initial Unemployment Benefits Steady at 1.5 Million in June from The Wall Street Journal
Housing Demand Rebounds in June Amid Cloudy Outlook from Multi-Housing News
NMHC Rent Payment Tracker Finds 92.2 Percent of Apartment Households Paid Rent as of June 20 from National Multifamily Housing Council
Black and Hispanic Demographics Signal Lower Confidence In Ability To Make Rent from National Multifamily Housing Council
Eerie Calm Settles on Housing Market Defying Doomsayers for Now from Bloomberg
US Property Price Growth Slows in May; Offices Sag from Real Capital Analytics