Just Wait: Analyst Estimates Peak of 2017 Apartment Supply
Digested from the Axiometrics
The guessing-game for 2017 apartment development no longer focuses on the number of new apartment homes, but rather when during the year the industry will hit peak nationwide, reports Axiometrics.
“The number of new apartment units coming to market has been on the rise since early this decade,” writes Axiometrics’ Dave Sorter. “It’s no secret that deliveries of new apartment supply in 2017 will reach its peak for this real-estate cycle. The rest of the story is how many units have been identified for delivery this year, and when they will be delivered.”
Apartment construction was at a virtual standstill as the great recession ended, then started picking up in 2012 and 2013 before taking off the past three years, according to Axiometrics' apartment data.
But though deliveries of new units increased 15.6 percent from 2014 to 2015 and 7.1 percent from 2015 to 2016, the 388,113 units identified for 2017 delivery (as of Feb. 27) is a full 34.1 percent more than the 289,381 that opened to renters in 2016, Sorter writes.
So now, it seems that the bulk of the new supply delivered in 2017 will come in the second half of the year. Almost 51 percent of the units identified for completion this year are expected in Q3 and Q4, with 28 percent in Q3 alone.