A great migration is underway
A great migration is underway. The COVID-induced recession has impacted urban submarkets across the country as nearly half of the U.S. workforce continues to work from home. While there are no indications that this will be a permanent population shift, the statistics tell the story of 2020 and what is likely to come in 2021. Lower-density and less-expensive markets have held up quite well in 2020 while urban gateway markets have been hit especially hard. Suburban submarkets will lead the multifamily sector’s recovery into 2021 while urban submarkets will lag until employees return to their offices, concerts and sporting events come back to the urban core, and bars and restaurants are fully reopened. While rents and sale prices rose in Sacramento, Stockton/Modesto, and some of the outlying Bay Area submarkets, the urban markets of San Francisco and Silicon Valley posted double digit annual rent decreases and significant occupancy losses in 2020.
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