Recession Caused 500,000-Unit Decrease In Multifamily Market Supply
Digested from “Apartment Market Still in Shortfall from Recession”
Axiometrics (7/10/15) Ehmann, Chuck
Multifamily starts are strong for 2015, even after construction delays, but supply is still not where it needs to be to match demand.
Part of the shortfall is due to lack of construction during the Great Recession. Multifamily starts were almost halved from 2009 to 2013, with an average of 173,600 units coming online each year, compared to an average of 291,900 units each year in the 14 years before the housing bubble burst. More than 500,000 more units would be available today had the recession not occurred, which would greatly affect the high rent growth and occupancy rates the industry is experiencing.
Starts from January 2014 to May 2015 total 329,100, or 37,200 more than the pre-recession average. Based on that overage, the industry should be able to catch up to expected supply in about 13 years.