Apartment Absorption Surged while Condominium Absorption Remained Steady

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Data from the Survey of Market Absorption of Apartments (SOMA), produced by the Census Bureau, suggest continued improvement for the multifamily sector in the second quarter of 2021 due to strong demand and low vacancy rates.

The absorption rate of unfurnished, unsubsidized apartments (the share rented out in the first three months following completion) rose by 15 percentage points to 72 percent in the second quarter of 2021 (from 57 percent in the second quarter of 2020), the highest rate since 2005 (Figure 1). Meanwhile, the number of apartments completed was also up during this period, from 65,700 units in the second quarter of 2020 to 84,150 units in the second quarter of 2021 (about a 28 percent increase).

The median asking rent for these apartments increased from $1,589 in the second quarter of 2020 to $1,669 in the second quarter of 2021 (a 5 percent gain). This is the second consecutive quarter with a year-over-year increase in the median asking rent price.

The SOMA also provides data on condominium completions and absorption (Figure 2).  Condominium absorption increased to 68 percent in the second quarter of 2021 (from 61 percent in the second quarter of 2020).  Meanwhile, condominium completions rose from 2,622 in the second quarter of 2020 to 3,070 in the second quarter of 2021.

The median asking sales price of condominiums dropped significantly to $477,300 in the second quarter of 2021, 37 percent lower than the asking sales price of $756,300 in the second quarter of 2020.



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