DFW is the construction torchbearer with more than 22,000 new units estimated by year end.
DALLAS—Having exceeded expectations last year, US apartment construction is projected to continue slowing down in 2019. According to Yardi Matrix market forecast data, there will be an estimated 299,442 new units delivered this year. This marks a significant drop of 8.2% compared to 2018. This is when deliveries totaled 326,240, almost matching 2017's nine-year peak of 331,765 new units.
Despite growing demand across the country, apartment construction began to face challenges beginning in 2018. High construction costs and a narrow pool of skilled labor are just a few of the factors hindering the development of new apartment units.
This decade's much-touted apartment boom ends with a total of 2.34 million new apartments, still below the impressive construction levels of the '70s and '80s. In the '70s, close to 3 million new apartments were built, followed by the '80s with 2.64 million units when the apartment market began a slowdown that continued in the following decade. In fact, between 1990 and 1999, apartment deliveries amounted to only 1.6 million, but started to pick up speed in the '00s, says the report.
However, one city continues to lead the way for US apartment completions and the answer is no surprise to Lone Star State residents. This year, Dallas-Fort Worth metro is the torchbearer with 22,196 new units estimated to become available by the end of the year. This is welcome news as the area's job and population growth has fueled increasing demand which in turn pushed rental costs to new heights.
DFW's unit count is considerably more than the runner-up, Seattle, where estimates indicate 13,682 new apartments, while New York makes it to number three with 13,418 new units.
Fort Worth is ahead of Dallas in terms of apartments projected with a total of 3,875, while Dallas is forecast for 3,859 new units in 2019. Outside of the two largest cities in the metro, Frisco comes up the strongest with plans to build 2,548 new units by the end of the year.
"Apartment construction is picking up speed in Dallas-Fort Worth metro this year," Florentina Sarac, RentCafe analyst, tells GlobeSt.com. "It's expected to surpass last year's champion in apartment construction, New York metro, pushing it to the third spot of the top 20 US metros by projected new apartments. Despite the shortage of skilled labor that the country is currently struggling with, the DFW metro is forecasted to surpass all other large metros in apartment construction. Increasing demand fueled by the 131,800 new residents added between 2017 and 2018 could be one of the reasons why developers are focused on building such a high number of apartments."
➤➤ Join the GlobeSt.APARTMENTS (formerly RealShare) conference October 29-30 in Los Angeles. The event will analyze the opportunity in the emerging trends and conditions of the multifamily market. Don't miss out on joining the 1,000+ of the industry's top owners, investors, developers, brokers and financiers as they gather for THE MULTIFAMILY EVENT OF THE YEAR! Click here to register and view the agenda.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
