Our focus on this week’s industry news assesses COVID-19’s changing impacts on the real estate market. We continue to observe strengths in the multifamily sector due to demand, low interest rates and the appeal of the greater affordability with rehab projects. First, Multi-Housing News reports on how COVID-19 will delay purchasing homes, which will increase the need for rental apartments. Freddie Mac points to growth in its Multifamily Apartment Investment Market Index driven by decreasing interest rates and positive net operating income growth nationwide. In the third article, the Scottsman Guide reviews Moody’s Analytics REIS data, looking at the top-five U.S. markets ranked for estimated vacancy-rate increases over the course of the year. Next, GlobeSt shares responses from the Real Estate Roundtable’s 2020 Q2 Economic Sentiment Index and the public policy group’s Future Conditions Index. Finally, ULI’s UrbanLand shares insights on opportunities for value in repositioning buildings, amidst the current pandemic.

A Hard Time for Homebuyers Might Be a Boon for Multifamily

Multi-Housing News – July 1

“Because of Covid, many Millennials might find it difficult to purchase a single-family home right now. But that doesn’t mean they’ll stay put in their current apartments.”

Freddie Mac’s Apartment Investment Market Index Experienced Strong Growth Driven by Falling Mortgage Rates

Freddie Mac – June 25

“Property prices grew in the nation and in 22 of the 25 markets. The largest metros, including New York, Chicago and Houston, were the only ones to experience price contraction.”

The Apartment Sector May Escape a Doomsday Scenario

Scotsman Guide – June 30

“With many places enacting eviction-moratorium policies during the crisis, occupancy rates may in fact remain stable in the near term. But if tens of millions of Americans lose their jobs — and if the unemployment rate stays relatively high — then multifamily will not escape unscathed.”

CRE Index Confirms Downturn but Indicates Higher Hopes for Future Conditions

GlobeSt – July 2

“According to the report, which measures views of CEOs, presidents and other top commercial real estate industry executives, any score above 50 is viewed as positive. The new score of 38 is a 14-point drop from the Q1 score of 52.”

The New, Old Real Estate: Capturing Value, Sustainability, and Community Impact by Repositioning Older Buildings

ULI UrbanLand – June 29

“In dense urban markets, repurposing existing buildings offers a sometimes-hidden opportunity to unlock enormous value while drastically reducing the environmental impact of construction.”