The year 2017 is a big one in terms of apartment construction. In fact, according to the latest report from RENTCafé based on data from Yardi Matrix, construction is at a 20-year high for America, with the nation’s biggest metros expecting a serious uptick in supply by year’s end.
To put that in perspective, 2016 has seen the largest number of units delivered post-recession, almost 286K – and this year? U.S. markets will grow by an estimated 346,000 new units—a whopping 21 percent jump over 2016’s numbers.
Fastest Growing Markets
The figures are indeed impressive, but the fact is that 64 percent of the new supply is concentrated in the nation’s top 20 metro areas, leaving many cities with low inventory, high demand and even higher rents.
New York City-Newark-Jersey City takes the cake, with nearly 27,000 units expected to hit the market by the end of 2017. Dallas-Fort Worth comes in at a close second, while another Lone Star State metro – Houston – takes No. 3. The remaining top 10 include Los Angeles, Miami, Denver, Washington DC, Atlanta, Seattle, and Nashville.
At No. 17 on the list, Charlotte is expected to gain more than 6,500 units by the end of the year. The boost in supply will certainly help with the area’s booming growth; the city experienced a 2 percent jump in population since 2015 and a 3.1 percent increase in jobs.
It’s a move that developers in other North Carolina cities should take note of. Raleigh, for example, has seen a 2.5 percent jump in population and a 2.6 percent rise in jobs, but the market will only gain approximately 2,400 new apartment units this year. Durham-Chapel Hill experienced a 1.5 percent jump in population and a 3.5 percent increase in jobs and will gain even fewer units— almost 1,800 to be exact. Burlington is expected to add over 1,200 units, while Wilmington and Greensboro-High Point will see less than 1,000 units hit the market each.
Room to Grow
Despite the growth in Charlotte—and across most large markets in the nation—construction levels aren’t quite where they need to be to meet the rising demand. According to the National Multifamily Housing Council, the nation needs 4.6 million new apartment units—or 373,000 units per year—to meet renter demand by 2030. It may not measure up just yet, but coming off the many years of waning construction numbers, it seems the market’s finally moving in the right direction.