There may be more apartments ready to enter the timeline in the coming months, but this could have both good and bad effects on the multifamily sector.
The current average of apartment unit development is approximately 250,000 units per year, according to National Real Estate Investor. This is still lower than the historical average of 300,000 units per year, which was the typical level recorded before the recession. However, the latest figure may be rising significantly..
While a sharp increase in new builds would benefit apartment developers, there could be problems on the rise, the news source added. This is because market recovery will need to improve to ensure demand will stay at a high level.
"Assuming current trends hold, over the rest of this decade, we will need at least 300,000 new apartments annually, and possibly as many as 400,000, to meet demand," said Mark Obrinsky, vice president of research and chief economist for the National Multi Housing Council.
If demand continues to be elevated, and consumers continue to look at the apartment sector as a viable option, this could signal a larger percentage of potential tenants filling out move-in paperwork in the hopes of landing a new unit.