According to data from the recently released U.S. Census Bureau’s Survey of Market Absorption of Apartments (SOMA) and further analysis provided by the National Association of Home Builders (NAHB), the multifamily sector saw continued improvement in Q2 of 2021 due to strong demand and low vacancy rates.
The absorption rate of unfurnished, unsubsidized apartments (the share rented out in the first three months following completion) rose by 15 percentage points to 72% in Q2 of 2021 (from 57% in Q2 of 2020), the highest rate since 2005. The number of apartments completed was also up during this period, from 65,700 units in Q2 of 2020 to 84,150 units in Q2 of 2021 (about a 28% increase).
The median asking rent for these apartments increased from $1,589 in Q2 of 2020 to $1,669 in Q2 of 2021, a 5% jump. This is the second consecutive quarter with a year-over-year increase in the median asking rent price.
The SOMA also provides data on condominium completions and absorption. Condominium absorption increased to 68% in Q2 of 2021, up from 61% in Q2 of 2020. The number of condominium completions rose from 2,622 in Q2 of 2020 to 3,070 in Q2 of 2021. However, the median asking sales price of condominiums dropped significantly to $477,300 in Q2 of 2021, -37% below the than asking sales price of $756,300 in Q2 of 2020.
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Apartment Absorption Surged while Condominium Absorption Remained Steady