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 thrive. Axiometrics expects deliveries to grow by more than 10%, to 91,957, in the fourth quarter of 2016, 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 to 102,617 deliveries in 2Q 2017.
Axiometrics estimates that a total of 343,582 apartment units will come onto the market in 2017, 55.7% of which in the first half of the year.
New York is expected to lead the nation in new apartment deliveries next year, with 27,210, representing an 88% leap over 2016. 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 is expected to continue for at least the next year. 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 36.0% to 23,821), Houston (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. Houston is expected to deliver just 956 new apartment units that year.
CHART: APARTMENT DELIVERIES BY YEAR