CREE-Sponsored Market Research Shows Strong Multihousing Market
The third quarter 2018 Washington Metro Area Economy and Multihousing Market report from commercial real estate firm Newmark Knight Frank showed continued strength in the regional economy which in turn supported low vacancy rates, increased rents, and widespread construction in the area’s multifamily market. The quarterly market research report is sponsored by the George Mason Center for Real Estate Entrepreneurship.
The regional economy added 64,900 jobs for the previous twelve months ending in August 2018, up from 50,900 jobs the prior year and more than the 20-year average of 43,300 annually. Unemployment subsequently fell to 3.5% by end August 2018. Researchers at Newmark Knight Frank expect the economic pace to be sustained through 2019.
Plentiful jobs among potential apartment renters resulted in 5,018 apartments absorbed in the third quarter of 2018, with a year-to-date absorption of 12,178 units. The average area occupancy rate is 95.9%. Both absorption and occupancy are performing better than a year ago in spite of a large increase of new apartments delivered to the market. At the end of the third quarter, 28,058 units were under construction and 3,678 units were delivered. An additional 7,568 units are planned and likely to deliver in the next three years. Even in the face of new supply, rents increased 2.6% annually, with Northern Virginia increasing by 2.5%. The District of Columbia had the lowest area rent increase of 1.9% due to a larger pipeline of new supply compared to the other jurisdictions.
The report also noted that increasing competitive pressures from new apartment communities have triggered a property amenities war with a new focus on services and socialization. In the past, physical amenities were the focus of attention such as rooftop pools, gym facilities, club rooms and on-site storage. Recent focus has been on less tangible service amenities useful to renters such as concierge services, phone apps, and in-house workout classes.
To read the entire report, please go HERE.
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