Multifamily Delivery Delays Continue as Pandemic Labor & Material Shortages Persist
The COVID-19 pandemic has affected many things since its onset nearly three years ago. Many imbalances created in 2020 persist, including material shortages from supply chain disruptions as well as a tight labor market, especially in the building trades. This dual phenomenon has led to increased delays in annual multifamily deliveries, as builders continue to struggle with construction worker shortages and issues getting building materials such as lumber and appliances. The old multifamily industry adage of roughly 10% of deliveries being pushed into the following year held true at the beginning of the pandemic, as estimated annual supply delays averaged around 9% between 4th quarter 2018 and into 3rd quarter 2021, according to data from RealPage Market Analytics. However, beginning in 4th quarter 2021, estimated annual supply delays almost doubled, averaging around 17%, peaking in the year-ending 2nd quarter 2022 at 18.3%. With an estimated 17.6% of anticipated deliveries delayed in the year-ending 3rd quarter 2022, we are seeing some moderation from that peak. However, it remains to be seen if this moderation will continue, as the pandemic disruptions persist, and construction delivery delays remain well above historic norms.