Despite Challenges, 2021 Apartment Construction Tops 330,000 for 5th Consecutive Year
Apartment building remains strong this year: more than 330,000 new rental units are expected to be delivered across the country, which is on par with the previous four years of the construction boom. And, despite the challenges posed by the pandemic, eight subways are expected to peak in five years of new apartments.
Specifically, 334,000 units are expected to be opened in the United States by the end of this year, according to estimates from Yardi Matrix. These figures reflect the striking difference between the aftermath of the pandemic crisis and that of the 2008 housing crisis: in 2021, there were almost three times as many apartments under construction as in 2011.
Compared to 2020, there is only a slight 2.5% drop in new units, with apartment construction maintaining a steady pace under the circumstances, which include: the pandemic, developers’ difficulties in finding skilled workers, financing, permits or exorbitant cost of wood.
“Pandemic changes and the resurgence of the residential rental market are emphasizing a new residential offer”, said Doug Ressler, head of business intelligence at Yardi Matrix. “The lack of entry-level housing supply and rising house prices will show that demand from the multi-family rental market will increase as new tenants enter the market and Millennials extend their rental commitments. . “
Specifically, the Dallas-Fort Worth (DFW) metro is expected to deliver the highest number of units for the fourth year in a row. At the same time, subways like Phoenix; Charlotte, North Carolina; or Orlando, Florida – which hasn’t been crazy about building in the past – is now making waves with a staggering number of new apartments planned.
DFW Metro on Building Spree, Phoenix Metro is coming in force
The DFW metro is still going strong and is expected to maintain its status as the premier metro in apartment construction, with 21,173 new units expected to hit the market before the end of 2021. Notably, the Dallas area continues to grow with the recent relocation from several large companies, such as the financial services giant Charles Schwab, as well as the country’s largest commercial real estate services company, CBRE Group.
Click on the metro bubbles below to see the number of new apartments projected in each zone.
In second place, the new York metro maintains its position on the list and is expected to add 19,375 new units. However, the Phoenix the metro is the one to watch this year: in third place with almost 16,000 new apartments due to be delivered this year, the metro has seen a rapid and impressive rise to the top – in 2020, Phoenix was in 8th place nationally after having took the 15th in 2019.
Meanwhile, two large metros with around 4.5 million inhabitants each who have faced a housing shortage for years, Boston and San Francisco – which are at the bottom of the list with just 8,455 and 7,872 new apartments, respectively – are slated to open this year. Not far behind, the subways of Kansas City, Missouri, and Raleigh, North Carolina, zones – although both smaller in size – are newcomers to the list. They managed to snatch 19th and 20th places on the list with an expected new supply of nearly 5,000 apartments each.
Denver metro construction rates drop by almost half
Conversely, only six of the top 20 metros experienced a decrease compared to last year. Among the more surprising appearances on this list are Denver (down 46%) and Seattle (down 19%), which were previously two of the top metropolises for new apartments throughout the 2010s.
At the other end of the spectrum, the Dallas metro continues to be built more than any other metro. Even so, it’s still one of the six subways that has seen some of the biggest slowdowns, with a 13% year-over-year drop in the number of units expected to be delivered here this year. The other metros not reaching their 2020 levels were Austin, Texas (down 10%), Boston (down 5%) and Minneapolis (down 0.3%).
Alternatively, some metros are making remarkable progress over last year, with Charlotte and San José, California, see the highest increases, at 100% and 79%, respectively. In fact, the Charlotte metro – with the Orlando and Phoenix subways – are the surprises of the list, making exceptional appearances. These three areas are expected to increase their apartment supply by more than 70%, the Orlando metro is expected to increase by 78% and the Phoenix metro by 76%.
5 year high in Phoenix and 7 other subways
Of all the metros analyzed, eight are expected to reach their peak apartment construction this year compared to their totals for the past five years.
The first is Phoenix, the most notable metro, which is expected to build a whopping 15,846 new units this year – considerably more than its deliveries in previous years. Currently seeing a real estate boom and a population increase of 2.1%, the metro is expected to meet the demand for new apartments in the neighborhood.
Then is Charlotte. With 10,723 new apartments planned, it is also one of the few metros to beat their own construction records. Additionally, the metropolitan area has not only recovered from its poor performance in 2020, but is also set to see higher numbers than in recent years.
Likewise, the Orlando The metro also recovered remarkably from its construction declines in 2018 and 2020: this year, the area is expected to complete 8,211 new units, significantly more than its efforts over the past five years.
“Strong demand fueled by robust inbound migration and job growthIs the reason why we are seeing such high levels of construction in these markets, according to Ressler. “The Southwest market that meets both of these conditions is Phoenix. Plus, Phoenix’s zoning and land availability add to the appeal.
Other metros ready to break their own records are San-Francisco; Tampa, Florida; San José; Kansas City, Mo.; and Raleigh, North Carolina With an increase of at least 36% in the number of new homes compared to last year, all plan to deliver between 5,000 and 8,000 new apartments.
Check out the metropolitan areas below to see the estimated number of new apartments in each area.
RENTCafé is a nationwide apartment search site that makes it easy for renters to find apartments and houses for rent across the United States.
To compile this report, the RENTCafé research team analyzed new apartment construction data in 109 metropolitan statistical areas in the United States. The study is based exclusively on apartment data relating to buildings of 50 units or more. Subways with less than 300 units or less than two properties / buildings have not been included.
The Bronx and Staten Island are not included in the New York subway data set.
The apartment data was provided by our sister company, Matrix Yardi, a business development and asset management tool for brokers, sponsors, banks and investment sources subscribing to investments in the collective housing, offices, industry and self-catering sectors. storage.
Apartment projections for 2021 are calculated based on a proprietary Yardi Matrix algorithm, which includes confirmed and probable completions for 2021 based on the issuance of a certificate of occupancy. Projections for apartments are estimates and are subject to change. Actual apartment completion dates depend on various factors and may change.
Data on the evolution of the population from 2019 to 2020 (as of July 1, 2021) come from United States Census Bureau.
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