Newmark’s latest report shows how growth in multifamily suburban and non-major markets was fueled by COVID-19.

The fourth quarter of 2020 was the strongest quarter on record for the U.S. multifamily market, which saw investment sales volumes totaling $56.7 billion, up 115.2 percent quarter-over-quarter. Most of that volume came in December, when pent-up demand helped fuel nearly $25 billion in sales.

Despite the record fourth-quarter results and a strong third quarter, the multifamily market ended 2020 at $138.7 billion, down 27.6 percent from 2019 due to the market slowdown earlier in the year because of the COVID-19 crisis, according to the 4Q20 United States Multifamily Capital Markets Report from Newmark.

Mike Wolfson, director of capital markets research at Newmark, said some of that capital was coming from investors who weren’t trading in hotel, urban office or retail properties during the pandemic and turned to multifamily, possibly for the first time, because of the sector’s resilience. The report noted allocation to multifamily rose to an all-time high of 34.2 percent in 2020, 8.1 percent higher than the long-term average of 26.1 percent.

“The level of capital is extremely high. The amount of people playing in this space for the first time as well as longtime, regular players is high,” he said.

Wolfson said he expects 2021 may follow a similar course, with more multifamily investments coming in the second half of the year as we see how the economy recovers and more Americans are vaccinated.

“The story is there is going to be deal flow, it just may not be immediate,” Wolfson told Multi-Housing News.