It’s been the Year of the Crane in 2016 with almost 500,000 multifamily units added throughout the country and 2017 is looking to match those numbers, though construction starts will be easing to a certain degree.
The New York City area led the way with almost 40,000 units opening their doors in 2016. Furthermore, more than 45,000 units are slated to come online in the New York area in 2017.
Three Texas markets were in the top 15 for newly leased units in 2016, with Dallas/Fort Worth and Houston making it within the top three spots. The Houston construction boom is finally winding down as projects begun prior to the energy sector dive began leasing in 2016. Even still, Houston still has another 20,000 units in the pipeline which are slated to enter the market in 2017.
Multifamily construction is booming in California, as well. Los Angeles ranked 4th and San Francisco/Oakland 11th in newly leased units in 2016. Both of those markets are projected to be within the top 5 in 2017 for newly leased units.
Meanwhile, the dirt continues to fly in Florida. Miami added more than 16,000 new units this year. In percentage growth terms, four Florida markets are in the top 15 for 2016 with Miami projected to top the list in 2017.
A few years ago major new construction growth was limited to mostly Texas, Florida and Georgia but now we are seeing activity all over the country. Denver, Seattle, Charlotte and Pittsburgh had all seen major expansion in multifamily over the last 12 months and will continue to expand into the new year.
Up until now most of the markets have done a good job of absorbing new units, but as the growth of newly added jobs slows it will put a strain on the ability of some markets to maintain overall occupancy. This year may very well be the recent high water mark in occupancy for some markets in the US.