Apartment Absorption Declined While Completions Increased in Q3 2020

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The U.S. Census Bureau’s Survey of Market Absorption (SOMA) shows that the absorption rate of unfurnished, unsubsidized apartments (the share rented out in the first three months following completion) fell by 5 percentage points to 51 percent in the third quarter of 2020 (from 56 percent in the third quarter of 2019) (Figure 1). The number of apartments completed rose significantly, however, from 69,630 units in the third quarter of 2019 to 85,960 units in the third quarter of 2020 (about a 23 percent increase). Although the absorption rate declined, more apartments were absorbed in the three months following completion, compared to the same period in 2019.

The median asking rent for these apartments fell slightly, going from $1,676 in the third quarter of 2019 to $1,650 in the third quarter of 2020 (a 2 percent drop). This is the second consecutive quarter with a year-over-year decline in the median asking rent price, though it is a slight improvement over the decline in the second quarter of 2020 (a 4 percent drop).

The SOMA also provides data on condominium completions and absorption (Figure 2).  Condominium absorption increased to 70 percent in the third quarter of 2020 (from 62 percent in the third quarter of 2019).  Condominium completions decreased, however, going from 7,824 in the third quarter of 2019 to 6,601 in the third quarter of 2020.

The median asking sales price of condominiums jumped significantly to $626,900 in the third quarter of 2020, 41 percent higher than the asking sales price of $445,900 in the third quarter of 2019.



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