Ranking U.S. Apartment Supply by Geographic Region
As apartment market fundamentals changed over the past few years, performances varied across the nation’s four geographic regions. One key area of differentiation recently has been increased volumes of new supply.
RealPage Market Analytics is exploring performance variations across the regions in a series of blog posts. Read the first two in this series, covering apartment demand by region and occupancy by region.
When talking about big apartment delivery volumes, the discussion always starts with the South. Apartment markets in the South region of the U.S. account for over half of the nation’s total construction volume from the past year. Roughly 190,150 units were delivered in the South, increasing the existing apartment base – which is already the largest nationwide at 7.9 million units – by 2.4%.
Last year’s apartment delivery volumes top recent norms, which have been ramping up in the South. The five-year average for this region is 172,000 units delivered annually while the 10-year norm is closer to 156,000 units.
Sun Belt markets are prominent in the South, and these are the areas mostly responsible for the region’s record new supply. Texas’ big three – Dallas, Houston and Austin – were supply giants in the past year, while volumes were also sizable in Washington, DC and Atlanta.
But if you thought last year’s deliveries were big, you should see what’s currently under construction. Apartment developments rising in the South total about 546,500 units – more than double the already heavy volumes from last year. That stock is scheduled to swell the existing count by another 6.9% – a stunning figure even for this region. Roughly 320,000 of those are slated to complete in the coming year, which is nearly double last year’s volume.
The second biggest chunk of new apartment supply nationwide – about 24% – was delivered in West region markets in the year-ending 1st quarter. Roughly 85,700 units came online here in the past year, increasing the existing base by 1.6%. This is not surprising, as the West has the nation’s second largest existing stock with nearly 5.3 million units.
Construction has also ramped up here recently, though not quite as much as in the South. In the past five years, annual deliveries in the West averaged about 77,500 units, while 10-year norms were closer to 68,500 units.
The West region’s supply leader – Phoenix – was also the nation’s supply leader in the past year. Other big delivery markets in the West included Los Angeles, Seattle and Denver.
Units under construction in the West right now total nearly 264,200 units, which would constitute a 5% increase in the existing stock. Roughly 165,500 of those apartments are scheduled to complete in the coming year, which is roughly twice the delivery volume from last year.
Roughly 13% of nationwide supply came online in the Midwest in the past year. About 47,100 units were delivered, increasing the existing base by 1.4%. The Midwest tends to be the most stable of the regions, and part of that stability stems from limited new supply volumes. However, just like everywhere else in the U.S., the Midwest has seen new supply increase recently. But, in true Midwest fashion, the upturn here has been more reasonable.
Recent volumes are pretty close to the Midwest’s five-year average annual supply tally of 45,000 units, and not too far beyond the 10-year average of 40,000 units.
Minneapolis was the Midwest supply leader in the year-ending 1st quarter, while Chicago also logged big deliveries. But, in a national light, these performances did not rank in the top 10. In fact, Chicago didn’t even make the top 20.
Apartments currently underway in the Midwest total a little over 108,000 units, a volume that will up the existing stock by 3.2%. Just shy of 68,000 units are scheduled to complete in the year-ending 1st quarter 2024, which is a bit ahead of last year’s volume.
The Northeast region accounted for just under 10% of nationwide apartment deliveries in the past year. Roughly 35,200 units completed here in the past 12 months, increasing the existing stock by 1.5%.*
This part of the county typically has the lowest volume of new apartment construction activity, often constrained by site availability, especially in the most recent construction boom. There has been a slight increase recently in local supply deliveries. The five-year average annual completion volume in the Northeast was 31,800 units, while the average was closer to 28,500 units in the past 10 years.
Just over 108,000 units are underway in the Northeast, which will add another 4.4% to the existing stock. Of that, roughly 56,100 units are scheduled to wrap up in the coming 12 months.
Up next, we’ll be examining rent growth across the nation’s four apartment regions.
*New York data has been excluded from Northeast region calculations, as this market’s behavior is not representative of typical regional patterns. Were New York’s data to be added to the analysis, the Northeast region would be double the current size, and weighted data from the nation’s largest city would skew the results for the region.
Up next, we'll be examining rents across the nation's four apartment regions.