This is only the beginning of decreasing rental rents. According to a report from CBRE, both occupancy rates and rental rates will likely continue to decline through the end of the year. The report shows that multifamily will bottom out in the fourth quarter with an 8.1% decrease in rental rates and a 3.1% increase in vacancy rates by the end of 2021. These predictions assume that the virus will be contained by the end of the year. If the outbreak carries into 2021, the market could see more hardship.

Despite these trends, multifamily remains one of the most attractive asset classes for investment. The same CBRE report also shows that multifamily will make a full recovery within two years, bottoming out in the fourth quarter and beginning to recover in 2021. This would make the asset class among the fastest to recover. 

While multifamily will likely recover once the public health crisis is resolved, investors are continuing to wait cautiously. In addition to uncertainty around rents and leasing, the election will also play a crucial role in apartment investment decisions. Berkadia’s 2020 Mid-Year Powerhouse Poll predicts that multifamily investment activity will not return to normal until 2021 because the impacts of the pandemic have not yet been realized. Investors are also hopeful for more government relief, making the election even more important than in previous years.