U.S. multifamily market remains healthy
The U.S. multifamily market remains healthy, with high levels of demand and a moderate vacancy rate of 4.6 percent, according to CBRE. However, continued new supply over the past few years has begun to affect vacancy and rents.
Completions totaled 64,800 units during the second quarter 2017 and 115,600 units during the first half of 2017. Both figures are very close to the prior year; the second quarter 2017 total is 3.4 percent below second quarter 2016, while the first-half 2017 figure is 4 percent above first-half 2016.
The second quarter 2017 net absorption totaled 113,200 units, a 1.2 percent increase from a year earlier. The first-half 2017 total was 149,800 units, 3.8 percent higher than last year’s first-half total.
For the year ending second quarter 2017, net absorption reached 220,300 units. Although this level was one of the highest in the current expansion period, it represented only 84.9 percent of the completions total.
Nearly half of the deliveries for the year ending in the second quarter 2017 were in nine metropolitan areas, lead by New York City (30,900 units), Dallas/Fort Worth (18,200), Washington, D.C., (13,600), and Houston (13,200).
Second quarter 2017 vacancy rate is up a modest 20 basis points from the prior year, marking the fifth consecutive quarter in which vacancy rose on a year-over-year basis.