CREE-Sponsored Report Shows Strong Apartment Market Amid Slowing Growth
(Excerpt from the Washington Metro Area Economy and Multifamily Market report for 1Q 2019 by Newmark Knight Frank and sponsored by the George Mason Center for Real Estate Entrepreneurship.)
The Washington metro area economy slowed its pace of growth in the first quarter but multifamily metrics remained strong. For the 12 months ending in February, the region added 20,700 jobs, down from the 2018 annual average of 35,300 jobs and lower than the metro area’s average growth of 41,000 jobs per annum. The February figure represents a moderation in job growth at this late stage of the cycle. However, the very low unemployment rate and other indicators point to a sturdy regional economy, and moderate growth is expected to continue through 2019.
After a slight decline at the end of 2018, apartment absorption turned positive during the first quarter of 2019, as the region absorbed 1,045 multifamily units. However, first quarter adsorption decelerated from the previous year, when the region absorbed 2,843 units during the first quarter of 2018. Still, the region’s occupancy rate registered 95.5%, up 40 basis points from one year ago. At the end of the first quarter, 29,808 units were under construction; 1,615 units delivered in the region during the first quarter. An additional 7,917 units are planned and likely to deliver within the next three years, bringing the region’s development pipeline to 37,725 units.
Region-wide, rents increased 2.8% over the past 12 months, with growth during this period strongest in Suburban Maryland at 3.0%. Northern Virginia experienced average rent growth of 2.8% and the District of Columbia experienced average rent growth of 2.3%. The region’s five-year average effective rent growth is 1.7%. The region’s rent growth remains sturdy considering the unprecedented level of new deliveries over the past several years.
(To view the entire report, go HERE.)
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