Absorption grows by 300% and deliveries expected to surge over 50%
Absorption in multifamily during the first half 2023 surged to 98,429 units, with an increase of 83,449 units in second quarter — nearly quadrupling the absorption seen in the first half 2022, according to Newmark in its latest Multifamily Capital Markets Report.
With a record-breaking 198,806 units already delivered in the first half 2023, total deliveries in 2023 are expected to surge 51.1 percent year-over-year.
Multifamily expenses increased 8.3 percent year-over-year, led by a 28.6 percent surge in insurance costs. While insurance growth rose nearly 30 percent, management and other expenses also saw double-digit year-over-year increases.
In the four quarters ended second quarter 2023, the median market saw inventory growth by 2 percent, and only 10 markets out of 150 experienced inventory growth of 5 percent or greater. This is about to change as, over the next four quarters, the median market’s inventory is set to grow by 3.2 percent with 28 markets boasting inventory growth of 5 percent or greater.
Price dislocation and an elevated interest-rate environment continue to hinder the investment sales market, as evidenced by the 71.8 percent year-over-year decline to $28.2 billion in quarterly sales volume. However, major markets have ticked up in first half 2023, and allocation to major markets has experienced a 7.2 percent increase from year-end 2022.
To read the report, click here.