Pub. 5 2020 Issue 5

11 ISSUE 5 2020 One of the industry’s biggest changes has been the acceleration of migration trends out of the major international gateway cities. E ven though the COVID-19 pandemic has created its share of challenges for the multifamily industry, it’s still a good place to be in real estate, according to Jeff Adler, vice president at Yardi Matrix. “Given the magnitude of the shock that has occurred, the multifamily sector is holding up pretty well, but there are some significant and meaningful cracks,” he says. “People who are staying are paying by and large. Despite the evictions moratoria, it has been pretty decent in the professionally managed sector of the industry. But we’re just at the begin- ning of the process. We ... have a lot more grinding to do. One of the industry’s biggest changes has been the acceleration of migration trends out of the major international gateway cities. “There were already people moving out of the urban core, and this has been accelerated,” says Adler. “The urban living value propo- sition amid the COVID-19 pandemic has taken a big hit.” Since the pandemic, Adler is seeing migra- tion trends that show people moving from the gateway markets to secondary tech hub markets, gateway markets to smaller cities within the same metros, and urban cores to the suburbs. There already had been a set of issues for the demand moving out of gateway cities that accelerated with shutdowns: af- fordability, demographic and family forma- tion trends to move to the suburbs, political risk pressures and congestion. During Yardi Matrix’s recent multifamily outlook webi- nar, Adler broke down some of the industry trends and what’s ahead. Larger unit sizes have had a resurgence. Many people with the ability to work from home have relocat- ed from high-priced markets to affordable cities or suburbs, giving them more space for a similar price point. Metros with higher average rents have generally seen negative growth, while rent growth in less expensive metros has been positive or flat. Continued on page 12