Apartment Construction Heats Up in Previously Less Active Markets
No, the U.S. apartment delivery pace has not quite reached its peak for the current cycle. Year-ahead scheduled completions total about 386,400 units, up from the trailing 12-month new supply figure of some 322,600 units recorded as of mid-2017.
Some already very active construction zones will contribute to the further run-up of deliveries. For example, the annual completion pace in Denver/Boulder goes to 15,100 units from 9,700 units. Atlanta’s expected new supply jumps to 16,500 units from 10,600 units, and the Dallas tally rises to 28,700 units from 22,300 units.
However, not all of the coming year’s increase in deliveries will occur in the metros that have led building in this cycle to date. Measuring change on a percentage basis, the biggest upturns in completions on the way, in fact, tend to be in markets where building, to date, has not been especially aggressive.
In a striking example of that pattern, Milwaukee’s product delivery pace is set to surge 157%, rising to some 5,200 units from about 2,000 units.
Other spots where scheduled completions in the coming year more than double the past year’s delivery volume are Orlando, Detroit and Fort Worth.
Especially notable increases in annual new supply also are on the way in San Francisco, Orange County, Jacksonville, Phoenix, Columbus and Salt Lake City.
Among these metros, Phoenix is the only one that ranks among the country’s top 15 metros for apartment completions in this cycle, with these 15 key building centers accounting for half the country’s total product additions.
The fact that construction is just now heating up across most of the markets on this list means that they tend to have strong occupancy levels that position them to handle some increase in the flow of new product moving through lease-up. Average occupancy as of mid-2017 among the group is just a hair under 97%, ranging from just under 96% in Phoenix to more than 97% in Detroit, Milwaukee, Orlando and Orange County.