CREE-sponsored Apartment Report Shows Strong Market with Changing Demographics
The latest Washington Metro Area Economy and Multihousing Market quarterly report issued by the research group at Newmark Knight Frank and sponsored by George Mason University’s Center for Real Entrepreneurship continued to show a stable regional apartment market with an active development pipeline supported by a strong regional economy.
Absorption was strongest in Northern Virginia with 2,691 units absorbed during the second quarter of 2018, followed by Suburban Maryland with 1,741 units and the District of Columbia with 1,635 units. Occupancy was highest in Northern Virginia at 95.6%, followed by the District of Columbia at 95.4% and Suburban Maryland at 95.3%. Region-wide, rents increased 1.8% over the past twelve months. Suburban Maryland was the highest rate of rent growth at 2.4% to an average rent of $1.72 per sq. ft., followed by the District of Columbia at 1.5% to an average rent of $2.83 per sq. ft. and Northern Virginia at 0.8% to an average rent of $1.96/sq. ft.
At mid-year 2018, 32,834 units were under construction with an additional 5,862 units planned and likely to deliver within the next three years. The District of Columbia has the largest pipeline with 15,557 units, followed by Northern Virginia at 14,366 units and Suburban Maryland with a more constrained 8,773 units.
The report also noted that the Washington DC region is experiencing a demographic shift as one of only two regions among the largest 15 metro regions in the United States that experienced a net outmigration of 25-34 year-old workforce millennials. While this age group still makes up the plurality of renters in the region with 30.1% of renter households, the fastest growing segment of the rental market is now the 55-74 year-old baby boomer cohort. From 2010 to 2016, baby boomer rental households grew 37.4% while millennial rental households grew only 13.8%.
(This article contains excerpts from the second quarter Washington Metro Area Economy and Multihousing Market Report. The full report can be viewed HERE.)
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