A new report by Yardi® Matrix indicates that multifamily deliveries might outpace demand in some key U.S. housing markets.
Yardi Matrix conducted a study to determine which areas might be at risk of oversupply or undersupply over the next five years. The research revealed that deliveries in 2016 and 2017 helped compensate for the construction shortage in the wake of the Great Recession.
"Most of the metros that are at short-term risk of oversupply have strong economies and healthy multifamily demand, so units coming online should be absorbed by growing populations," the report concludes.
Markets and submarkets with outsize development activity, however, "can expect volatility" that will give rise to higher vacancy rates and stagnant rent growth. Achieving market equilibrium going forward will require developers to "intelligently calibrate the amount and location of new projects" to accommodate finite demand.
Yardi Matrix identified Denver, Seattle, Dallas, Phoenix, Miami and Charlotte, N.C., as key markets at risk of oversupply over the next five years. Demand is projected to exceed supply in Los Angeles, California's Inland Empire, Houston, New York, San Diego and Sacramento, Calif.
Read "U.S. Multifamily Supply and Demand Forecasts by Metro" to learn more about homeownership, population shifts, social trends and other factors affecting the multifamily market.
Related Stories
Market Data | Mar 24, 2021
Architecture billings climb into positive territory after a year of monthly declines
AIA’s ABI score for February was 53.3 compared to 44.9 in January.
Market Data | Mar 22, 2021
Construction employment slips in 225 metros from January 2020 to January 2021
Rampant cancellations augur further declines ahead.
Market Data | Mar 18, 2021
Commercial Construction Contractors’ Outlook lifts on rising revenue expectations
Concerns about finding skilled workers, material costs, and steel tariffs linger.
Market Data | Mar 16, 2021
Construction employment in January lags pre-pandemic mark in 42 states
Canceled projects, supply-chain woes threaten future jobs.
Market Data | Mar 15, 2021
Rising materials prices and supply chain disruptions are hurting many construction firms
The same firms are already struggling to cope with pandemic impacts.
Market Data | Mar 11, 2021
Soaring materials costs, supply-chain problems, and project cancellations continue to impact construction industry
Costs and delayed deliveries of materials, parts, and supplies are vexing many contractors.
Market Data | Mar 8, 2021
Construction employment declines by 61,000 in February
Association officials urge congress and Biden administration to focus on new infrastructure funding.
Market Data | Mar 2, 2021
Construction spending rises in January as private nonresidential sector stages rare gain
Private nonresidential market shrinks 10% since January 2020 with declines in all 11 segments.
Market Data | Feb 24, 2021
2021 won’t be a growth year for construction spending, says latest JLL forecast
Predicts second-half improvement toward normalization next year.
Market Data | Feb 23, 2021
Architectural billings continue to contract in 2021
AIA’s Architecture Billings Index (ABI) score for January was 44.9 compared to 42.3 in December.
