# Executive Summary: Richmond Multifamily Market — Q2 2026The Richmond, Virginia multifamily market enters the second half of 2026 in a similar position to where it stood in March: absorbing an elevated but declining construction pipeline while demand continues to outperform history. Vacancy sits at **8.3%**, total inventory has grown to **109,117 units**, and **4,667 units** remain under construction. Rent growth has slowed to **0.9% annually** as the market digests recent deliveries — but the supply story is turning, and the data increasingly supports the same thesis: *this is a temporary overhang, not a structural demand problem.*---## Key Performance Indicators (Q2 2026)| KPI | Data Point (Q2 2026) || :--- | :--- || **Total Apartment Inventory** | 109,117 units || **Market Vacancy Rate** | 8.3% *(vs. 8.1% national average)* || **12-Month Net Absorption** | 2,684 units *(83% above 10-year annual average of 1,464)* || **Average Asking Rent** | $1,609 per month || **12-Month Rent Growth** | +0.9% *(vs. +0.7% nationally)* || **Under Construction Pipeline** | 4,667 units across 19 properties (4.3% of inventory) || **12-Month Delivered Units** | 2,379 units || **12-Month Sales Volume** | $835.3 million || **Market Cap Rate** | 6.3% – 6.4% |> **Data source:** CoStar Group, licensed to Marcus & Millichap, July 26, 2026.---## Economic Overview: Demographics and EmploymentRichmond's metropolitan statistical area totals roughly 1.39 million residents across the City of Richmond, Henrico, Chesterfield, Hanover, and surrounding counties. The market's median household income of **$86,559** now exceeds the national figure of $84,955, and unemployment sits at just **3.6%** versus 4.5% nationally — a gap that continues to support renter demand and rent-paying capacity.### Key Demographic Statistics (Q2 2026)| Demographic Category | Richmond Metro | U.S. National Average || :--- | :--- | :--- || **Total Population** | 1,388,472 | 342,433,219 || **Households** | 565,342 | 134,479,438 || **Median Household Income** | $86,559 | $84,955 || **Labor Force** | 723,317 | 170,451,438 || **Unemployment Rate** | 3.6% | 4.5% |*Source: Oxford Economics via CoStar.*### Employment Market DriversRichmond's total employment stands at approximately 726,000 workers across a genuinely diversified base. Finance plays an outsized role locally, anchored by Capital One and Truist, and Richmond remains one of the few U.S. markets hosting both a Federal Reserve Bank and a U.S. Court of Appeals — institutional anchors that provide employment stability through economic cycles.#### Employment by Major Sector (Q2 2026)| Industry Sector | Jobs (Thousands) | Location Quotient | 12-Month Growth || :--- | :--- | :--- | :--- || **Trade, Transportation & Utilities** | 132 | 1.0 | -0.82% || **Professional & Business Services** | 124 | 1.2 | +0.10% || **Education & Health Services** | 116 | 0.9 | +1.85% || **Government** | 112 | 1.1 | -1.25% || **Leisure & Hospitality** | 68 | 0.9 | -2.64% || **Financial Activities** | 59 | 1.4 | -0.37% || **Natural Resources, Mining & Construction** | 43 | 1.1 | -1.22% |*Source: Oxford Economics via CoStar.*#### Major Employer & Quality-of-Life Advantages:* **Jabil Expansion:** Announced a new manufacturing facility at Crosspointe Logistics Center in Prince George's County in 2026, expected to employ over 350 people.* **CoStar Group Growth:** Announced 1,000 new Downtown Richmond positions in 2025, following its 2021 announcement of 2,000 new jobs.* **Logistics Hub:** Located on Virginia's fall line at the intersection of I-85, I-95, I-295, and I-64, supported by Richmond Marine Terminal upgrades.* **Higher Education:** VCU and UVA provide a steady pipeline of young professionals into the local renter pool.* **Top Business Climate:** CNBC named Virginia the **#4 state for business** in its 2025 Top States for Business list.---## Apartment Vacancy Analysis: Current Levels, Trends, and ForecastRichmond's vacancy rate of **8.3%** sits above the market's 10-year historical average of 7.0% but is essentially in line with the current national average of 8.1%. Vacancy has been mostly stable over the past year, and the market has posted positive net absorption for **13 consecutive quarters**, with demand exceeding 600 units per quarter for nine straight quarters.### Vacancy by Property Class (Q2 2026)| Property Class | Vacancy Rate | Total Units | Avg Asking Rent || :--- | :--- | :--- | :--- || **4 & 5 Star** | 9.6% | 41,037 | $1,831 / mo || **3 Star** | 7.8% | 38,905 | $1,572 / mo || **1 & 2 Star** | 7.3% | 29,175 | $1,312 / mo || **Market Total** | **8.3%** | **109,117** | **$1,609 / mo** |> *As in March, elevated vacancy is concentrated almost entirely in newly-delivered 4 & 5 Star lease-up product, while stabilized 1 & 2 Star assets are running tighter than the market average. About **80% of Richmond's net absorption** over the past year has gone into 4 & 5 Star properties.*### Submarket Performance Overview* **Highest Vacancy Submarkets:** West End (15.4%), Downtown Richmond (10.0%), South Richmond (9.5%), Northside (9.1%), Petersburg/C Hghts/Ft Lee (8.4%).* **Lowest Vacancy Submarkets:** Dinwiddie County (0.6%), Sussex County (1.3%), Goochland County (3.3%), Hanover County (4.8%).#### Key Submarket Drivers:* **Western Henrico County:** Richmond's largest submarket (28,282 units / 25.9% of total). At 8.2% vacancy, it absorbed 628 units over the past year with 1,209 units under construction. Average rent: $1,677/mo.* **Downtown Richmond:** Accounts for 16,172 units (14.8% of inventory) and posted the highest absorption at 644 units despite carrying 10.0% vacancy. Leads construction with 1,858 units underway.* **Midlothian:** Affluent southern suburb holding 8,085 units with 8.0% vacancy and $1,853/month average asking rent — Richmond's second-highest-priced submarket.---## Rent Analysis: Pricing, Growth Trends, and National Comparison### Richmond Rents vs. National Averages| Metric | Richmond Average | National Average | Discount || :--- | :--- | :--- | :--- || **Average Asking Rent (All)** | $1,609 / mo | $1,800 / mo | -10.6% || **4 & 5 Star Asking Rent** | $1,831 / mo | $2,240 / mo | **-18.3%** |### Top Submarket Rents (Q2 2026)| Submarket | Asking Rent / Unit | 12-Month Rent Growth || :--- | :--- | :--- || **West End** | $1,984 / mo | +4.5% || **Midlothian** | $1,853 / mo | +1.3% || **Goochland County** | $1,816 / mo | -5.9% || **Hanover County** | $1,743 / mo | +0.8% || **Downtown Richmond** | $1,722 / mo | -0.1% |---## Construction Pipeline & Delivery ForecastRichmond currently has **19 properties totaling 4,667 units under construction**, representing 4.3% of existing inventory (above the 2.7% national average).### Top Development Projects Currently Under Construction| # | Property Name | Units | Stories | Est. Completion | Developer || :--- | :--- | :--- | :--- | :--- | :--- || **1** | Harp's Landing Apartments | 398 | 4 | Nov 2027 | Gumenick Properties || **2** | The Russell | 388 | 5 | Dec 2026 | Greystar Real Estate Partners || **3** | 3200 W Moore St | 366 | 6 | Sep 2027 | Hoffman & Associates || **4** | 3 Notch'd Flats | 325 | 4 | Sep 2026 | Edward Rose & Sons || **5** | Regent at Regency | 314 | 5 | Sep 2026 | Thalhimer Realty Partners || **6** | MAA Rove | 306 | 5 | Oct 2026 | Mid-America Apartment Communities || **7** | Altitude on Main | 302 | 16 | Aug 2026 | RPC Realty Capital || **8** | Midlothian West | 275 | 3 | Jul 2027 | BWS Enterprises || **9** | Alexan Manchester | 260 | 5 | Sep 2027 | Trammell Crow Residential || **10**| 200 E Marshall St | 254 | 12 | Jan 2027 | SNP Properties |### Delivery & Absorption Forecast| Year | Deliveries | Net Absorption | Construction Ratio | Year-End Vacancy || :--- | :--- | :--- | :--- | :--- || **2026 YTD** | 1,035 | 1,587 | 0.7x | 8.3% || **2026 (Full Year)** | 3,031 | 3,080 | 1.0x | 8.6% || **2027** | 2,034 | 2,455 | **0.8x** | **8.1%** || **2028** | 2,147 | 1,886 | 1.1x | 8.2% || **2029** | 1,752 | 1,571 | 1.1x | 8.2% || **2030** | 1,855 | 1,721 | 1.1x | 8.2% |---## Investment Activity & Sales AnalysisTrailing 12-month sales activity reached **$835.3 million** across 46 transactions — well above the market's 10-year annual average of $382.2 million.### Recent Significant Sales Transactions| Property | Units | Yr Built | Sale Date | Price | Price / Unit || :--- | :--- | :--- | :--- | :--- | :--- || **Marshall Springs at Gayton West** | 420 | 2014 | Dec 2025 | $119,750,000 | $285,119 || **2000 West Creek Apartments** | 373 | 2018 | Jun 2026 | $115,000,000 | $308,310 || **Innsbrook Square** | 305 | 2023 | Feb 2026 | $81,700,000 | $267,868 || **Colony at Centerpointe** | 255 | 2016 | Jun 2026 | $74,600,000 | $292,549 || **Triton Glen** | 250 | 2023 | Dec 2025 | $65,000,000 | $260,000 || **The Boulders Lakeview** | 212 | 2023 | Jan 2026 | $51,500,000 | $242,924 || **Innslake Place** | 221 | 2020 | Feb 2026 | $51,250,000 | $231,900 |### Cap Rate Projections by Asset Class| Property Class | 2026 YTD | 2026 (Full Year) | 2027 | 2028–2030 || :--- | :--- | :--- | :--- | :--- || **4 & 5 Star** | 6.2% | 6.2% | 6.1% | 6.0–6.1% || **3 Star** | 6.4% | 6.3% | 6.3% | 6.2% || **1 & 2 Star** | 6.6% | 6.5% | 6.5% | 6.4% || **Overall Market** | **6.4%** | **6.3%** | **6.2%** | **6.2%** |---## Investment Outlook & Conclusion### Strengths* High median household income ($86,559) and tight regional unemployment (3.6%).* Long-term rent growth convergence upside due to the deep discount (-10.6% overall, -18.3% Class A) versus national averages.* Strong demand trajectory with 13 consecutive quarters of positive net absorption.### Risk Mitigation Strategies1. **Submarket Selection:** Focus on Western Henrico County and Midlothian for durable structural demand.2. **Conservative Lease-Up Assumptions:** Underwrite current vacancy rates through mid-2027.3. **Class Targeting:** Target stabilized 1–3 Star assets facing minimal new luxury construction competition.---### Author & Report MetadataThis market analysis was prepared by **Justin Ferguson**, First Vice President of Investments at **Marcus & Millichap**, utilizing data from CoStar Group *(licensed July 26, 2026)* and Oxford Economics.* **Market Coverage:** City of Richmond, Henrico County, Chesterfield County, Hanover County, Goochland County, Midlothian, Downtown Richmond, Western Henrico, South Richmond, Petersburg, and surrounding Richmond MSA submarkets.* **Report Date:** July 26, 2026 | **Next Update:** October 2026‍

Justin Ferguson, Senior Vice President of Investments at Marcus & Millichap, shares his insights on the current housing market. With over $450 million in apartment transactions, he emphasizes how buyers often have more property investment knowledge than sellers before an offer is even made. This business perspective is key for achieving financial freedom in real estate.

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