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Yardi Corom
(April 2, 2020) – At face value, the rental data released today by Yardi Matrix for March 2020 looks solid, with rent growth averaging 2.9 percent year over year and up $6 from the month before.
But those healthy numbers don’t reflect the ongoing national crisis due to the COVID-19 pandemic. With the U.S. now leading the world in active cases of the virus, nationwide non-essential business shutdowns and accelerating unemployment numbers, drastic changes are likely in store for the months to come.
“As unemployment claims eclipse records and government stimulus reaches unseen heights, the question arises: Who will be able to pay rent in the coming months?” wonders the latest National Multifamily Report from Yardi Matrix. The new report reflects data collected in the second and third weeks of March.
Yardi experts hosted a 90-minute webinar this week focused on the anticipated impacts of COVID-19 on the multifamily housing market. Demand for apartments has already dropped by double digits and lease-ups are likely to be intensely impacted by the crisis.
“We are seeing the rapid adoption of technology tools to run (multifamily) operations from a distance,” said Jeff Adler, vice president of Yardi Matrix. You can view the full webinar recording and presentation materials online.
Adler, along with several other Yardi multifamily market experts, spoke about the forthcoming challenges for the U.S. economy as a whole and multifamily specifically. They also answered dozens of audience questions. The next few months are likely to be rocky, they cautioned.
“Demand for apartments has fallen at least 30 percent over the last 2 to 3 weeks, but so have move outs,” Adler said. Multifamily vacancy rates are likely to remain stable in the coming months, especially since so many protective measures have been put in place for renters by federal, state and local governments.
The National Multi Housing Council (NMHC) is recommending suspension of evictions for residents affected by COVID-19, as well as a 90-day pause on rent increases. NMHC, in partnership with leading apartment data providers like Yardi, will also analyze weekly metrics assessing the overall effect of the COVID-19 pandemic on the U.S. multifamily industry. More on that here.
To get out ahead of the situation, Adler recommended that owners and managers be proactive about reaching out to residents (using safe social distancing practices, of course). As many as 1 in 9 Americans indicated in a major survey that they may not be able to pay a mortgage or rent in April due to unemployment or other loss of income associated with the pandemic.
“Get on top of this now to keep people in their apartments. Work out a payment plan if you have to,” Adler suggested. There are many options to consider for various situations but be sure to act before rent is due at the end of April to prevent unexpected surprises.
You can find many more best practices for dealing with this unprecedented situation and all of the webinar slides on the Yardi Matrix webinar resources page. And access additional upcoming webinars and more on Yardi’s COVID-19 support resources page.
