Prior to stay-at-home orders and businesses closing, the multifamily market was already seeing a decline in both permits and starts, a new report from RealPage said.
Permits fell to 415,000 units on a seasonally adjusted annual basis in February, marking the second-lowest annual rate in 17 months, down 20.2% from January and 5% from February 2019.
Now, due to the effects of the coronavirus, permits are more likely to decrease, although many local governments have deemed construction and real estate an essential industry.
And, as many open houses have been canceled or moved to virtual, the number of movers has also slowed down.
According to Zumper’s National Rent Report for April, Google search volumes for apartments for rent were down between 10% and 35% last week in its top cities, while long-term inventory dropped by about 12% last week.
Multifamily completions were down in all regions, with the Midwest, Northeast and South regions down by about half from last year, while the West region was down by about a quarter.
In February, multifamily construction starts trailed behind permits, month over month. While starts saw a 17% month-to-month decline between January and February, they were still up 44.3% year-over-year. However, that data is from before the spread of COVID-19.
Overall, total residential permitting levels have exceeded 1.4 million units in six out of the last seven months, exceeding 1.5 million units in January for the first time since March 2007, according to the report.
Total residential starts averaged 1.36 million units in the past 12 months, while single-family starts averaged 920,000 units, RealPage said.