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Mid-Atlantic Real Estate Investment Market Report: May 2020

Looking Ahead: 3 Consumer Shifts

In a matter of weeks, lives across the U.S. have changed in ways we could have never imagined.  People can no longer work, eat, shop, travel, and socialize as they had before. Instead of traveling, shopping, and going out to restaurants, many consumers are tightening their wallets to only spend on essentials.

Physical distancing has changed the way people interact and inhabit space and could potentially lower demand for certain types of spaces. This has created an unprecedented challenge for the real estate industry. The longer this pandemic continues, the more likely we are to see lasting changes in behavior.

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Market Activity

Richmond, VA
Market Overview

According to Cushman & Wakefield, the first quarter saw the largest quarterly total number of units absorbed over the last five years. Nearly 750 units were absorbed and over 860 units were delivered during the quarter. Despite uncertainty surrounding the economic impact of the ongoing global pandemic, the overall vacancy rate held steady at 6.9 percent. The coming months will reveal more of the impacts to occupancy levels but developers are pushing ahead on nearly 5,000 units that are currently under construction.

671
Homes Sold
$257,000
Avg. Home Price
$1,110
Median Rent
U.S Census Bureau: first quarter 2020
8.8%
Rental Vacancy Rate
1.0%
Homeowner Vacancy Rate
10.6%
State Unemployment Rate
Metro Area Unemployment
Blacksburg--Radford, VA
4.0%
Charlottesville, VA
2.9%
Harrisonburg, VA
3.1%
Kingsport-Bristol-Bristol, TN-VA
4.2%
Lynchburg, VA
3.9%
Richmond, VA
3.4%
Roanoke, VA
3.4%
Staunton-Waynesboro, VA
3.0%
Virginia Beach-Norfolk, VA-NC
3.6%
Washington-Alexandria, DC-MD
3.3%
Winchester, VA
3.1%

Market Activity

Philadelphia, PA
Market Overview

Philadelphia’s housing market is shaping up to continue its trend of being on of the hottest markets in the nation. Since 2015, home prices have appreciated by nearly 41.2 percent. Last year was the fifth consecutive year of increasing home prices. According to statistics from Zillow, the region is a seller’s market. However, it’s expected that there will be a cooling-off trend for the next 12 months, and home prices will remain flat or decrease by roughly 1 percent.

1,016
Homes Sold
$250,000
Avg. Home Price
$1,652
Median Rent
U.S Census Bureau: first quarter 2020
8.1%
Rental Vacancy Rate
1.3%
Homeowner Vacancy Rate
15.1%
State Unemployment Rate
Metro Area Unemployment
Allentown-Easton, PA-NJ
5.8%
Altoona, PA
6.2%
Bloomsburg-Berwick, PA
6.4%
Chambersburg-Waynesboro, PA
5.4%
East Stroudsburg, PA
7.4%
Erie, PA
6.9%
Gettysburg, PA
4.2%
Harrisburg-Carlisle, PA
4.8%
Johnstown, PA
7.7%
Lancaster, PA
4.4%
Lebanon, PA
5.2%
New York-Jersey City, NY-NJ-PA
4.0%
Philadelphia-Wilmington, PA-MD
5.1%
Pittsburgh, PA
6.2%
Reading, PA
5.9%
Scranton-Wilkes-Barre-Hazleton, PA
7.4%
State College, PA
4.4%
Williamsport, PA
7.4%
York-Hanover, PA
5.0%
Youngstown-Warren, OH-PA
7.2%

Market Activity

Washington D.C
Market Overview

During the first quarter, office space for the Washington D.C. metro area was negative and down from the previous quarter. The District of Columbia registered a positive absorption of 134,237 square feet while the Washington metro saw -338,026 square feet of net absorption. This is the first time since the third quarter of 2018 that the metro area’s net absorption has been negative. Northern Virginia had -232,504 square feet and -239,759 square feet in Suburban Maryland.

620
Homes Sold
$620,000
Avg. Home Price
$2,234
Median Rent
U.S Census Bureau: first quarter 2020
7.4%
Rental Vacancy Rate
2.0%
Homeowner Vacancy Rate
Homes sold and average home price data is from Redfin.com. Median Rent data is from rentcafe.com.

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