Deliveries ramp up
Continuing at an accelerated pace, quarterly deliveries are expected to peak in Q3 of this year. By year-end, 389,000 units will have delivered nationally with Dallas, New York and Houston seeing the greatest increase in inventory. Among secondary markets, Nashville, Austin and Charlotte are seeing the most active construction pipelines.
Demand keeps pace
Despite elevated deliveries nationwide, absorption remains firm. Markets across the South remain top performers with Nashville, Charlotte, Austin, Dallas-Ft. Worth and Orlando each absorbing 3.2 percent or more of their respective inventories over the past 12 months.
Rent gains in the West
Six markets across the West saw annual effective rent growth at or above 5.0 percent in the second quarter, ranging from Phoenix (5.0 percent) to Sacramento (10.2 percent). Inland Empire, Salt Lake City, Seattle-Bellevue and Las Vegas round out the list.
Multifamily First Look highlights
Softening 10 basis points compared to year-end 2016, the national vacancy rate inches up in the face of cresting deliveries in 2017. And in spite of declines in annual effective rents in New York, vacancy is 3.2 percent, tightening 10 basis points since year-end.
2.5% Effective rent growth:
After six years above 3.0 percent, U.S. annualized rent growth has slipped below that threshold in the first half of 2017. Effective rents in New York, San Francisco and Silicon Valley have each declined year- over-year.
1.1% Net absorption:
National absorption remains at 1.1 percent, where it stood at the end of 2016. Outside of the South region, Seattle-Bellevue, Northern New Jersey and Silicon Valley are the markets seeing the highest absorption across the country.
1.4% Construction deliveries:
With deliveries set for a peak year in 2017, we can expect to see this rate rise through the second half of 2017. The rate is projected to be 1.5 percent at year-end, the highest it’s been since 2007.