In its latest report, the Census Bureau estimates that annualized starts of structures with five or more units stood at 445,000 in October, up 28.2% over the same month a year earlier. However, multifamily permits were only 5.8% higher.
Could the long-predicted slowdown in the multifamily boom finally be happening? The market researcher Axiometrics looked at its identified supply data and concludes that multifamily deliveries could peak by mid-year 2017.
Over the next three quarters, though, this market sector should continue to thrive. Axiometrics expects deliveries to growth by more than 10%, to 91,957, in the fourth quarter of 2016, and then recede a bit to 91,721 in the first quarter of 2017 (which would still be nearly 49% more than 1Q 2016), and then jump again to 102,617 deliveries in the second quarter of 2017, which would be 48.5% more than 2Q 2016.
Axiometrics estimates that a total of 343,582 new apartment units will come onto the market in 2017, 55.7% of which in the first half of the year.
Axiometrics estimates that 343,582 apartment units will come onto the market next year, more than half in the first six months. Image: Axiometrics
New York is expected to lead the nation in new apartment deliveries next year, with 27,210, representing an 88% leap over 2016 deliveries. (Three of New York’s boroughs—Brooklyn, Queens, and Midtown Manhattan—are among the top 10 submarkets for projected deliveries in 2017.)
Axiometrics points out, though, that New York’s delivery schedule “is a telling example of how construction delays have affected the apartment market.” Those delays are, in part, the result of an ongoing construction labor shortage that other data have shown is expected to continue for at least the next year.
Indeed, New York’s apartment deliveries are expected to fall precipitously in 2018, to 13,312.
Following New York in projected apartment deliveries next year are Dallas (up 36% to 23,821), Houston (which will actually be down 21.2% to 17,313), Atlanta (up 38.8% to 13,210) and Washington D.C. (up 33.7% to 13.141).
All of these metros are expected to see deliveries plummet in 2018, which Houston expected to deliver only 956 new apartment units that year.
The leading metros for multifamily deliveries are all expected to see significant falloffs by 2018. Image: Axiometrics
Axiometrics states that most of new apartments that come onto the market will be absorbed because “the U.S. economy remains in growth mode.” However, by this time next year, apartment deliveries should scale back to more historically normal quarterly levels, in the mid 60,000 units range.
Related Stories
Mixed-Use | May 16, 2018
Los Angeles mixed-use building uses prefabricated wood frame to reduce costs
SPF:architects designed the building.
Multifamily Housing | May 14, 2018
Yardi Matrix report shows U.S. rent surge in April
Year-over-year rent growth leaders in April were Orlando, Fla., Sacramento, Calif., Las Vegas, Tampa, Fla., and Phoenix.
Multifamily Housing | May 9, 2018
6 noteworthy projects: Transit-oriented rental community, micro-unit residences, and an office tower becomes a mixed-use community
These six recently completed projects represent some of the newest trends in multifamily housing.
Multifamily Housing | May 1, 2018
Boutique condo provides 41 exclusive residences in Miami’s Bay Harbor Islands
Revuelta Architecture International designed the building.
Multifamily Housing | May 1, 2018
Call for experts: We’re looking for designers and builders of bicycle storage facilities for multifamily
The editors of Multifamily Design+Construction magazine seek experts for a "how-to" article in the next issue.
Multifamily Housing | Apr 30, 2018
For housing costs, consider all occupancy costs - not just property taxes
It's inaccurate to focus on property taxes as a percentage of home value without acknowledging the actual cost of housing to which this percentage is applied.
Multifamily Housing | Apr 27, 2018
1912 publishing house becomes luxury residential condominiums
Gottesman Architecture and GSArch designed the renovated building.
Adaptive Reuse | Apr 26, 2018
Edison Lofts building is New Jersey’s largest non-waterfront adaptive reuse project
Minno & Wasko Architects & Planners designed the building.
Multifamily Housing | Apr 24, 2018
Adrian Smith + Gordon Gill Architecture designs 47-story condo tower in Miami
The tower will be located in Miami’s South Brickell neighborhood.
Multifamily Housing | Apr 23, 2018
Mass timber design for multifamily housing
The adaptability of urban development could be revolutionized through the inherent strength of mass timber construction.