The third quarter ended on a rather bleak note, as the final estimate of Q2 GDP showed negative growth once again. While we have known that the economy has been in a technical recession for some time, last week’s read serves as confirmation of the shrinking economy. And while we won’t likely see a drastic decline in growth this quarter, I anticipate another modestly negative growth rate when the first estimate of Q3 GDP is released at the end of October. All signs continue to point to a slow grind, as interest rates rise, and global demand appears to weaken.
Multifamily fundamentals continue to soften, and nationwide occupancy fell below 95% for the first time since April, 2021. New York is the only metro in the top 30 to have a higher occupancy rate than at this time last year. Rents are also pulling back significantly, as most markets are posting rent declines on a week-over-week basis. The only silver lining remains in the leading indicators traffic and leasing, as flat performance on a weekly basis and slight increases on an annual basis provides some optimism that the multifamily market is approaching a soft landing.
Key Takeaways – Data as of 10/02/2022
Traffic and Leases:
Occupancy and Leased:
Net Effective Rent:
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