March 7, 2022

Richmond Q4 Multifamily Market Report: Four Straight Quarters of Tightening Vacancy in 2021

Highlights:

Apartment operating conditions in Richmond posted strong gains during the final quarter of 2021, with vacancy tightening and rents pushing higher. Developers struggled to meet demand during 2021, as absorption levels outpaced new supply growth. Deliveries and absorption will likely closely track one another in 2022, and vacancy is expected to tighten modestly.
The multifamily vacancy rate in Richmond dropped in all four quarters of 2021. During the final three months of the year, the rate fell 30 basis points to 3.6 percent. For the full year, vacancy tightened by 170 basis points.
An improving vacancy rate and accelerating renter demand for units sparked rent growth. In 2021, asking rents spiked 12.3 percent, ending the year at $1,378 per month.
Sales activity increased significantly during the fourth quarter of 2021, outpacing levels recorded in the first nine months of the year. Cap rates during the fourth quarter averaged 4.4 percent while the median price reached $160,800 per unit.