Winter Construction Delays Leave Vacancies Low
Digested from "Can Apartment Supply and Demand Keep Pace?"
National Real Estate Investor (4/21/15) Anderson, Bendix
Vacancies have stagnated year over year since late 2013, as cold winters have slowed the introduction of new units to the marketplace for a second consecutive year. And with demand for units expected to increase in the months ahead, vacancies could remain low as supply is slow to come to market.
Approximately 240,000 units are scheduled for construction in 2015—almost double the average for 1999 to 2008—but only 29,000 came online in the first quarter, contributing to an already tight market. Demographers predict that demand will continue to increase, however, justifying the increase in the number of units planned.
Freddie Mac expects this shortage to continue. And rents could outpace inflation by as much as 3 percent as a result of high demand.