Richmond, VA

Market Update

Richmond's population has shown steady growth, reaching approximately 1.37 million in the fourth quarter of 2026, reflecting a year-over-year increase of 1.34%. This upward trend follows a consistent trajectory from 1.32 million in 2021 to 1.36 million in 2024. The region has experienced a net migration of about 29,165 people, contributing to a diverse demographic landscape. With a median household income of $83,460 and an unemployment rate of 3.8%, the local economy appears stable, supported by an employment figure of approximately 701,691. The renter share stands at 33.7%, indicating a significant demand for rental housing.

In terms of multifamily fundamentals, the HUD Fair Market Rent for a two-bedroom unit is benchmarked at $1,771, which is below the current asking rent of $1,711 for similar units. Year-over-year multifamily rent growth is recorded at 3.8%, aligning closely with the national median growth rate of 3.5%. The median gross rent in Richmond is $1,546, suggesting that while rental prices are increasing, they remain relatively affordable compared to the income levels in the area. This balance may foster continued demand for multifamily housing, despite the upward pressure on rents.

Capital market activity over the trailing 24 months has seen 154 transactions with a total volume of approximately $345.3 million, resulting in a median price per unit of $270,781. The multifamily cap rate remains at 7.15%, which is roughly 11 basis points wider than the national median of 7.04%. This indicates a slightly higher risk premium for investors in the Richmond market. As the market evolves, maintaining a close watch on economic indicators and demographic trends will be essential for informed underwriting decisions.