In fact, approximately 250,000 new units were delivered through August – comfortably above the 200,000 units and 215,000 units from the same portion of 2020 and 2019, respectively. Even as deliveries have ramped up, construction times have maintained their upward trajectory.
Adds RealPage’s Jay Parsons, in his analytics blog, “Unlike in the single-family market, the lack of apartment availability does not trace to a lack of construction. In fact, new completions over the last 12 months reached a three-decade high of 362,807 units.
“Not long ago, that volume of supply was considered a major risk factor for apartment investors. Fast forward 18 months, and the supply wave proved surprisingly insufficient to meet the demand boom.”
Net absorption in the 12 months ending in September surged to a record high of 610,715 units. That topped the previous record set earlier this year, and “smashed” the pre-2021 record set in 2000 by an incredible 50.5%, Real Page reports.
From Start to Lease Up: 15.7-Month Average
At the national level, ALN reports that the average time from a construction start to a lease start for properties brought to market so far in 2021 has been 15.7 months. The 15.7-month average represents a 7% increase from 2020, and 2020 saw an 11% increase compared to 2019 due to myriad COVID-19 complications.
Though there is a sample size difference between properties that began leasing during the first eight months of 2021 and properties that began leasing during the 12 months of recent-completed years, the increase in deliveries so far in 2021 has mitigated that somewhat, ALN reports.
The upward trajectory in construction time has been a trend that was in place prior to the pandemic, but the pandemic certainly exacerbated the issue. As recently as 2016, the average time from construction start to lease start was 11.7 months. By 2019, the average was already up to 13.3 months. So, from 2016 to 2019, the average construction time rose by about six weeks. Since the end of 2019, the average has climbed by about 10 weeks.