Multifamily Sales Volume Down 12% in Q1 but Set for Rebound
First-quarter results for the multifamily sector were divided between year-over-year declines and long-term resilience, according to Newmark’s United States Multifamily Capital Markets Report for Q1.
Quarterly sales volume in the apartment sector totaled $35.5 billion, a 12.0% drop from the year-ago period. However, March sales volume was up 13.7% from a year ago, mortgage debt outstanding rose to $1.7 trillion, up 8.2% Y-O-Y, and Newmark reports that sales volume is expected to pick up in the year’s second half due to demand from domestic and foreign buyers.
Similarly, trailing 12-month rent growth declined -0.9% as of March 31. However, Newmark reports that rents are projected to rebound sharply over the next two years.
Further, rent collections averaged 94.2% nationwide for Q1, a slight improvement from 94.0% in the fourth quarter of 2020. The majority of markets are now recording their highest collection rates in more than a year.
And despite operational challenges posed by COVID-19, Newmark’s Jonathan Mazur, Mike Wolfson and Sean Marmora report that multifamily annualized total returns as of Q1 were 1.7%. Historically, multifamily has outperformed following recessions