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 | Jul 28, 2020
Senate Republicans' coronavirus relief measure includes provisions that will help hard-hit construction firms recover
The HEALS Act includes essential liability, workforce, financial & unemployment reforms, but association will work to get needed infrastructure investments included in final relief measure.
Market Data | Jul 27, 2020
6 must reads for the AEC industry today: July 27, 2020
Customized labs give universities a recruiting edge and the U.S. construction pipeline remains robust through the first half of 2020.
Market Data | Jul 27, 2020
The U.S. construction pipeline remains robust through the first half of 2020, despite pandemic
Projects currently under construction stand at 1,771 projects/235,467 rooms, up 3% and 1% respectively, YOY.
Market Data | Jul 24, 2020
5 must reads for the AEC industry today: July 24, 2020
North Carolina will stop relying on FEMA flood mapping and Cal Poly Pomona's newest project.
Market Data | Jul 23, 2020
New LEED guidance from USGBC helps cities and communities expand resilience efforts in response to the COVID-19 pandemic
Credits integrate public health and social equity with sustainability planning.
Market Data | Jul 23, 2020
6 must reads for the AEC industry today: July 23, 2020
Skanska selects Pickard Chilton to design new ofice tower and days grow long at nursing homes as virus lockdowns drag on.
Market Data | Jul 22, 2020
6 must reads for the AEC industry today: July 22, 2020
Phase one of Toronto's The Orbit detailed and architecture billings remains in negative territory.
Market Data | Jul 21, 2020
Nonresidential building spending to decline through 2021
The commercial building sector is expected to be the hardest hit.
Market Data | Jul 21, 2020
7 must reads for the AEC industry today: July 21, 2020
Abandoned high-rise becomes mixed-use luxury apartments and researchers are developing anti-coronavirus tech for buildings.
Market Data | Jul 20, 2020
Construction employment rises from May to June in 31 states, slips in 18
Recent data from Procore on jobsite workers’ hours indicates employment may have leveled off.