There is a growing imbalance of supply and absorption in the multifamily sector.
Full-year absorption for 2022 totaled 169,000 units compared to 431,000 deliveries, according to CoStar.
The national vacancy rate moved from 5.7% at the end of the third quarter to 6.2% on the last day of December, according to CoStar.
Yardi Matrix finds that the vacancy rate continues to fall as demand weakens (though it is still positive overall) and deliveries abound in some markets.
“While 2022 was expected to come in lower than 2021’s record-breaking absorption at 700,000 units, the lackluster demand weakened in each preceding quarter throughout the year, resulting in half of the initial projection,” CoStar’s Q4 Rent Report said.
Yardi Matrix holds that 2023 should be a strong year for new supply with more than 400,000 units expected to come online in 2023.
It said that markets with high population growth such as Austin, Nashville, Charlotte, and Orlando will be the beneficiaries.