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RealPage presents 2021 market outlook
RealPage recently presented a webinar forecasting the likely trends for the multifamily housing market over the next two years. Presenters were Greg Willett, Chief Economist, and Adam Couch, Market Analyst.
The webinar spent significant time reviewing the performance of the multifamily housing market in 2020 in order to set the stage for what they expect to come. Some of this is material that was covered in RealPage’s 2020 review, and will not be discussed here. This article focuses on RealPage’s view of what lies ahead.
Employment drives the economy
RealPage reported that the recovery of the huge number of jobs lost to the pandemic-inspired shutdowns is only half complete. There are still 9.2 million net jobs that have disappeared from the economy. RealPage based their forecasts for the next two years on the economy recovering 5 million jobs in 2021, mostly in the second half of the year, and another 2 million jobs in 2022.
The apartment industry enters 2021 with overall occupancy running at a relatively healthy 95.6 percent, according to RealPage. By apartment class, occupancy is 94.6 percent in Class A properties, 95.7 percent in Class B properties and 96.3 percent in Class C properties. However, there is a huge pipeline of new product on the way and this is likely to put pressure on occupancy.
The first chart, below, shows the RealPage forecast for new product deliveries over the next two years. While deliveries in 2020 hit a recent high, 2021 deliveries are expected to go even higher, reaching a little over 400,000 units.