Richmond and National Multifamily Dynamics
National Market Overview
In 2024, the multifamily market across the U.S. experienced strong rental demand, with net absorption nearing 667,000 units. Despite this robust demand, new construction starts are decelerating, which may eventually reduce the influx of new supply. However, the pipeline of ongoing projects ensures that deliveries and work in progress will continue to enter the market over the next 24 months.
Richmond-Specific Insights
In Richmond, while there has been above-average rent growth, the ongoing delivery of new projects could moderate this trend. The high volume of units coming online suggests that the market will remain well-supplied, potentially limiting significant rental price increases until these new units are fully absorbed, which might not occur until around 2027.
Investment and Strategic Considerations
For investors in Richmond, this environment suggests a need for strategic focus on property management and tenant retention to navigate through a period of abundant supply. Enhancing property features or offering competitive amenities may provide an edge in maintaining high occupancy rates.
Financing and Market Opportunities
With substantial multifamily debt maturing soon in a high-interest rate environment, investors should also strategize around financing challenges. Opportunities may arise to acquire properties at competitive rates as the market adjusts to the high supply, particularly for well-capitalized investors prepared to act on these conditions.
Sources:
- Newmark, “4Q24 US Multifamily Capital Markets Report.”
- Zillow, “Market Trends.”
- Bankrate, “Financial Data.”
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