While US Slows Apartment Builds, DFW Bucks the Trend
Increasing demand fueled by the 131,800 new residents added between 2017 and 2018 is likely one of the reasons that developers are focused on building such a high number of apartments in DFW.
DALLAS—Having exceeded expectations last year, US apartment construction is projected to continue slowing down in 2019. According to Yardi Matrix market forecast data, there will be an estimated 299,442 new units delivered this year. This marks a significant drop of 8.2% compared to 2018. This is when deliveries totaled 326,240, almost matching 2017’s nine-year peak of 331,765 new units.
Despite growing demand across the country, apartment construction began to face challenges beginning in 2018. High construction costs and a narrow pool of skilled labor are just a few of the factors hindering the development of new apartment units.
This decade’s much-touted apartment boom ends with a total of 2.34 million new apartments, still below the impressive construction levels of the ’70s and ‘80s. In the ‘70s, close to 3 million new apartments were built, followed by the ’80s with 2.64 million units when the apartment market began a slowdown that continued in the following decade. In fact, between 1990 and 1999, apartment deliveries amounted to only 1.6 million, but started to pick up speed in the ‘00s, says the report.
However, one city continues to lead the way for US apartment completions and the answer is no surprise to Lone Star State residents. This year, Dallas-Fort Worth metro is the torchbearer with 22,196 new units estimated to become available by the end of the year. This is welcome news as the area’s job and population growth has fueled increasing demand which in turn pushed rental costs to new heights.
DFW’s unit count is considerably more than the runner-up, Seattle, where estimates indicate 13,682 new apartments, while New York makes it to number three with 13,418 new units.
Fort Worth is ahead of Dallas in terms of apartments projected with a total of 3,875, while Dallas is forecast for 3,859 new units in 2019. Outside of the two largest cities in the metro, Frisco comes up the strongest with plans to build 2,548 new units by the end of the year.
“Apartment construction is picking up speed in Dallas-Fort Worth metro this year,” Florentina Sarac, RentCafe analyst, tells GlobeSt.com. “It’s expected to surpass last year’s champion in apartment construction, New York metro, pushing it to the third spot of the top 20 US metros by projected new apartments. Despite the shortage of skilled labor that the country is currently struggling with, the DFW metro is forecasted to surpass all other large metros in apartment construction. Increasing demand fueled by the 131,800 new residents added between 2017 and 2018 could be one of the reasons why developers are focused on building such a high number of apartments.”
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