DALLAS—A new report from Axiometrics—created primarily from US Census Bureau data—suggests that multifamily construction permiting took a wild ride in August.
The annual rate of 343,000 units represents a 13.4% decrease from July's total of 396,000 units, following a 28.2% increase the previous month. The August rate represented a 17.5% increase from last August's figure of 292,000 units. MF permits have averaged 366,000 units for the first eight months of 2014 and 369,000 units since August 2013.
The top 10 MSAs for MF permitting for the trailing 12 months ending August 2014 were New York City, 25,299; Houston, 23,684; Dallas, 16,245; Los Angeles, 12,235; Seattle, 11,543; Washington DC, 10,522; Austin, TX, 9,898; Atlanta, 9,356; Phoenix, 7,578 and Denver, 7,177.
The total number of multifamily units permitted in the top 10 metros (133,537) is about the same as the total for the next 38 metros (134,175). Within the current top 10 metros, multifamily permitting increased significantly from 2013. In Houston, it rose by 75%; Dallas, 62%; Phoenix, 57%; Los Angeles, 42%; Seattle, 41%; Washington DC, 36%; New York, 26% and Atlanta, 24%. Multifamily permitting declined in Denver and Austin by 7% and 15%, respectively.
In terms of multifamily construction values, annual growth measured 35.9% in August a jump from 31%, which has been the level since this metric peaked at 65.1% in December 2012. Actual values reached $44.2 billion, the highest since September 2008.
The multifamily sector's greater growth rate (compared to historical norms) can be attributed to Increased demand for apartments, versus single family homes,coming out of the Great Recession, according to Axiometrics. Also leading to the trend is the fact that the type of new apartments constructed has changed from primarily garden to mid-rise wrap or pedestal style, as well as high-rises, which cost more to build.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
