The Better of Instances for House Development in Half a Century: New York Takes the Lead in 2022


  • This yr, 420,000 new flats are anticipated nationwide. In truth, multifamily building within the final two years is at a 50-year excessive: House completions final surpassed the 400,000 unit mark in 1972.
  • New York is poised to surpass the Dallas-Fort Price metro space in condo building, claiming the highest spot for the primary time since 2018.
  • Half of the highest 20 metro areas are estimated to hit their five-year peaks in condo deliveries this yr, together with newcomers Nashville, TN, and Portland, OR.
  • The Miami metro, the nation’s best rental market, made a powerful climb again to the highest, surpassing tremendous builders like Houston and Austin, TX.

New condo building within the U.S. is flexing its muscle as soon as once more in 2022, regardless of urgent financial issues and provide chain disruptions within the aftermath of the pandemic. And with 420,000 new rental items projected to be accomplished this yr, multifamily building is at a historic, 50-year peak.

This building growth is pushed by pent-up demand for flats nationwide, particularly as some renters postpone their dream to turn into householders amid hovering inflation and rising rates of interest.

By and huge, condo builders have picked up the tempo in each 2021 and 2022, virtually unexpectedly exceeding even probably the most optimistic projections for the post-pandemic multifamily panorama.

“The development trade is lastly returning to pre-pandemic ranges of exercise however continues to be being hampered by three acquainted challenges: labor shortages; materials prices and availability; and provide chain points,” mentioned Doug Ressler, supervisor of enterprise intelligence at Yardi Matrix.

Surprisingly sufficient, the New York metro is projected to ship probably the most flats in 2022, exceeding Dallas-Fort Price from the highest place for the primary time since 2018. What’s extra, builders in half of the highest 20 metros have launched into a veritable condo constructing spree and are projected to hit their five-year highs this yr.

Curiously, there’s one large motive why so many metros are set to interrupt their information from the final 5 years: As Ressler defined, “individuals who lived with household or pals throughout the pandemic shaped impartial households as employment and financial savings surged.”

Trying on the city-level knowledge, Houston is absolutely the chief so far as the variety of flats opened within the first half of the yr. Sizzling on the heels of House Metropolis is one other construction-crazed Texas location, Austin, adopted at a better distance by Seattle, WA.

New York metro firing on all cylinders as Dallas-Fort Price deliveries decelerate after a 4-year streak

Regardless of slight setbacks in earlier years (largely as a consequence of pandemic-induced hurdles), New York is again on its ft once more — and with a bang: A report 28,153 model new rental flats are anticipated to be completed right here earlier than the top of the yr, which is sort of 50% larger than the variety of flats that have been accomplished all through the metro in 2021.

That’s a exceptional comeback for a metro that has been bleeding residents as a direct consequence of the pandemic and subsequent restrictions. For instance, in 2021, New York’s inhabitants decreased by 1.6%. That interprets into roughly 328,000 individuals, in keeping with U.S. Census knowledge.

On the identical time, Dallas-Fort Price metroplex builders hit the brakes on multifamily building, even because the metro has continued to see a number of the largest inhabitants will increase within the nation. The previous torchbearer of condo deliveries is ready so as to add 23,571 new items this yr, which is roughly 10% lower than its 2021 ranges.

Maybe probably the most shocking efficiency by way of multifamily constructing this yr comes from the Miami metro — the nation’s hottest condo market. This metro climbed a powerful six positions from 2021 to safe the third spot in our present rating. That’s a well-deserved comeback for Miami, which was one of many busiest condo builders previous to the pandemic.

Different metros that caught our consideration this yr have been Nashville, TN; Chicago; and Portland, OR — all of which have been new entries on our listing. Of the three newcomers, probably the most new flats are anticipated to open in Nashville (9,620). Renters in Chicagoland will profit from 8,573 new flats by the top of this yr, whereas 8,476 new leases are anticipated to open their doorways within the Portland metro space.

In the meantime, in comparison with 2021 ranges, the Boston; San Jose, CA; and Kansas Metropolis, MO, metro areas are taking issues straightforward construction-wise — a lot in order that they have been knocked out from our prime 20 this yr.

Half of the highest 20 metros set to achieve 5-year peaks in new flats

In response to excellent demand for leases, 10 of the highest 20 metros for condo building are on observe to hit report highs in 2022 in comparison with their whole deliveries in every of the final 5 years.

The chief of the pack is the New York metro, which has been coping with a critical lack of obtainable items for a number of years now. Right here, a mix of rising rates of interest, lack of obtainable items and rising want for extra residing house have many would-be homebuyers persevering with to lease. As a consequence, New York builders have upped their sport and the metro is on observe to see the best variety of items delivered within the final 5 years.

The subsequent record-breaker is Miami, the place the prevailing provide of leases merely cannot sustain with sky-high demand. Right here, too, builders have plunged right into a constructing frenzy that’s set to culminate in record-breaking numbers in 2022 in comparison with the world’s completions in the previous couple of years.

Equally, the Austin, TX, metro space is pushing arduous to carry an estimated 18,288 new items — the best variety of completions the metro has seen prior to now 5 years — to the market earlier than the top of 2022. What’s extra, Austin managed to climb three positions this yr to squeeze by Houston (one other heavy builder in Texas) and land in fourth place in our rating.

Different metros which might be set to interrupt their five-year information in 2022 are Phoenix; Seattle; Orlando, FL; Nashville, TN; Raleigh, NC; Portland, OR; and Tampa, FL. Every of those is predicted so as to add between 6,000 and 16,000 new flats by the top of this yr.

Houston, Austin lead the nation in new flats constructed within the 1st half of 2022

On a city-level comparability, completions within the first six months of the yr paint a special image, with Texas cities nonetheless being hard-pressed to fulfill the large demand for flats.

Of the 4 Texas places that made their method into our prime 20, Houston was the undisputed chief when it got here to deliveries, with 4,746 items constructed within the first half of 2022. Firms like Hewlett Packard, NRG Power, Roboze and Exxon Mobil Corp. proceed to broaden or relocate right here, which continues to draw renters searching for good job alternatives within the metropolis. Consequently, Houston is working to fulfill the rising demand for housing.

Subsequent up was Austin, the place builders added 4,236 new flats to the market throughout the first six months of 2022 — and are set to proceed this tempo of building all through the remainder of the yr. On that observe, this rising tech hub’s skyline will look a bit totally different by the point the brand new yr rings in. One of many largest condo buildings to achieve completion in Austin in 2022 is Sienna on the Thompson, which can carry 331 new items to the town’s housing inventory.

The opposite Texas cities that have been within the prime 20 nationwide for brand new flats have been San Antonio — taking sixth place with 2,394 new items added within the first half of 2022 — and Dallas, with 1,507 items constructed (18th place).

In the meantime, the variety of Seattle flats elevated by 3,232 between January and June this yr to achieve the third spot on our listing. Nonetheless, provide is struggling to maintain up with demand within the Emerald Metropolis — which, like different main coastal cities, has been dealing with an excessive lack of housing for a number of years now. And, this tempo of building is not prone to decelerate anytime quickly: Seattle’s inhabitants is projected to hit 1 million by 2044 and metropolis officers are already engaged on updating the One Seattle Plan that additionally tackles new methods so as to add extra housing.

Subsequent got here Miami, the poster little one of South Florida’s attraction for renters from all throughout the nation. Builders opened almost 3,000 new flats in Miami within the first half of the yr, however that also wasn’t sufficient to ease the skyrocketing demand for leases within the metropolis.

Additional north in Florida, the variety of new flats for lease in Orlando grew by 2,257 between January and June, whereas renters in search of flats in Tampa had an additional 2,056 new items to select from. These cities have been the one two different Florida places in our rating, taking seventh place and 14th place, respectively.

The remainder of the highest 20 cities with most new flats accomplished within the first half of the yr have been: Washington, DC; Phoenix; Los Angeles; Queens, NY; Charlotte, NC; Chicago; Manhattan, NY; Alexandria, VA; Portland, OR; Nashville, TN; San Diego, CA; and Atlanta.

Click on on every tab under to see the estimated variety of new flats for every metropolis in that metro space.

Methodology is a nationwide condo search web site that allows renters to simply discover flats and homes for lease all through the U.S.

To compile this report, RentCafe’s analysis workforce analyzed new condo building knowledge throughout 125 U.S. metropolitan statistical areas. The research is completely based mostly on condo knowledge associated to buildings containing 50 or extra items. Metros with lower than 300 items or lower than two properties/buildings weren’t included.

The Bronx and Staten Island weren’t included within the New York metro knowledge set.

House knowledge was offered by our sister firm, Yardi Matrix, a enterprise growth and asset administration device for brokers, sponsors, banks, and fairness sources underwriting investments within the multifamily, workplace, industrial and self-storage sectors.

House projections for 2022 have been calculated based mostly on a Yardi Matrix proprietary algorithm that features confirmed and certain completions for 2021 based mostly on the issuance of a certificates of occupancy. After the certificates of occupancy is issued, the standing of the property could be thought of “accomplished”. For knowledge on the metropolis degree, the evaluation consists of all properties which have a certificates of occupancy issued between January 1 and June 30, 2022.

House projections are estimates and topic to vary. Precise condo completion dates depend on quite a lot of components and will change.

Knowledge on inhabitants modifications from 2020 to 2021 (as of July 1, 2022) was in keeping with the U.S. Census Bureau.

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