Research Outline

Multifamily During Market Declines


To identify historical data for multifamily homes, divided by 1-4 unit and 5+, in terms of rents, vacancies, and evictions; identify differences between multifamily and single family.

Early Findings

  • Arbor Crowd directly states, "One asset class that historically is seen as more resilient in a recession is multifamily real estate." They continue by explaining, "The multifamily sector also has certain features that help it standout against other asset classes. Multifamily buildings typically feature larger tenant bases than other asset types, so individual vacancies do not have the material impact on revenue as they do with retail and office properties. Moreover, the short-term nature of leases in apartments allow owners to be more flexible to react to changing economic conditions. They can quickly adjust to short-term vacancies, but can also limit the long-term impact on revenue as leases entered into during recessions can be quickly renegotiated during the recovery."
  • According to the U.S. Bureau of Labor Statistics, multifamily rents have generally risen during the past several decades, including during times of recession.
  • In addition, the U.S. Bureau of Labor Statistics reports "Rental vacancy in the U.S. has generally increased during past recessions, but not dramatically. It’s widely noted that the Great Recession was the most financially devastating period since the Great Depression in the 1930s, and even then, the vacancy rate for U.S. rentals only peaked at approximately 10.6% in 2009 before falling steeply in the following years."
  • RCL Co detailed, "History tells us that recessions have had an adverse impact on rental housing markets and capital market conditions, but that except for the recent “Great Recession” and the early 1970s recessions, in most recent recessions rental housing production contracted moderately, rent declines were modest and short-lived, and vacancies briefly increased but by limited amounts."
  • The Census Bureau defines larger rental apartment buildings within multifamily as those having more than 10 units.
  • CBRE reported, "U.S. multifamily property rents declined less than those of office and industrial properties during the 2001 economic recession and their growth rate was considerably higher post-recession." They also explained, "Multifamily rents have outperformed those of the other major property sectors during and after the 2008-2009 recession in three ways. The sector experienced the lowest level of rent decline, the fastest recovery to pre-recession peaks and the longest post-recession period of rent growth."
  • There appear to be sufficient sources of information available in the public domain, such as this report by Event Cloud, that differentiate data between single family residential and multifamily.