For apartment investors, more buying opportunities may be on the horizon.
Despite facing roadblocks from the pandemic, materials shortages and a tight labor market, apartment starts were on the rise this summer and completions are expected to hit 334,000 units, according to Yardi Matrix estimates.
This burst of deliveries is comparable to the previous four years of the construction boom and proves that the pandemic didn’t bring construction to a screeching halt as the housing crisis did. In 2021, nearly three times more apartments will be built than in 2011.
Some metros are seeing more apartments open than others. Eight cities are expecting to hit five-year highs of new apartments. While the Dallas-Ft. Worth area is primed to deliver the most units for the fourth year in a row, markets like Phoenix, Charlotte and Orlando, where CGI is active, are seeing more units come on the market. The good news is these units, specifically the ones in Texas, are being absorbed, according to Real Page.
New York is the No. 2 overall market, with 19,375 projected new apartments this year. Los Angeles ranks fifth at 13,682. Atlanta ranks seventh with 11,409, while Orlando is projected to hit 8,211 new units in 2021, ranking No. 13, according to Yardi Matrix. Previously, Orlando had decreases in construction in 2018 and 2020.
With solid absorption in many of these cities, there should be plenty of momentum to fill these new apartments. And, if and when these properties hit the market, there should be no shortage of bidders, given the amount of capital chasing multifamily.