Based on preliminary data, we estimate a 4.3% vacancy rate for CBRE EA’s national sample of professionally managed apartments in Q1 2020—down 30 bps year-over-year and up 20 bps quarter-over-quarter.
Because the escalation of the economic effects of the COVID-19 pandemic occurred very late in Q1, multifamily vacancy was only minimally impacted in the first quarter of 2020. Though the virus has been spreading worldwide since the beginning of the year, the numbers of cases in the U.S. only began its exponential climb in late March. By April, most state governors had issued stay-at-home orders, closing schools, and shuttering non-essential businesses.
Looking forward, pandemic related job losses will push the vacancy rate upward in Q2. The extent and severity of the employment downturn is uncertain and will depend on several factors at the intersection of public health, policy, and economics. There are promising signs that stay-at-home orders combined with a robust stimulus will see multifamily vacancy rebound by Q4 2020.
During Q1, 53 EA-tracked markets posted year-over-year vacancy rate decreases, 11 posted increases, and two went unchanged. For the third consecutive quarter, El Paso (-280 bps) registered the largest drop in year-over-year vacancy. All six gateway markets saw vacancy rates decrease: Boston (-10 bps), Chicago (-60 bps), Los Angeles (-50 bps), New York (-50 bps), San Francisco (-80 bps), and Washington DC (-20 bps).