Northern California’s multifamily market disrupted by COVID-19 as demand declines and sales volume dips
Through the first half of 2020, Northern California’s multifamily markets have experienced volatility in both market fundamentals and sales activity. The COVID-19 pandemic has forced many households to reevaluate where and how they live. Regional effective rents decreased 1.3 percent quarter-over-quarter as the Bay Area sees notable drop-offs in demand, particularly in San Francisco, while the Central Valley markets of Sacramento and Stockton/Modesto have seen rents hold or increase despite the pandemic. The regional occupancy rate of 95.6 percent decreased 70 basis points from the first quarter as San Francisco’s occupancy dropped 200 basis points. Sales volume dropped off dramatically across all seven Northern California markets. Sales activity will take time to recover to pre-pandemic levels, however, multifamily properties remain a viable asset class for investors during uncertain times.