Oversupply risks revisited: Looking a year later at residential rental growth and the construction pipeline post-pandemic
The last three years have seen dramatic swings in population flows, working patterns and residential real estate pricing. Real estate investors and developers chased population inflows, home price appreciation and rental growth to several metros in the U.S. south. Soon these cities had some of the largest multifamily supply pipelines among major U.S. cities. Was this growth sustainable, or did the rapid changes in population flows and new housing construction position these metros for a short-term period of oversupply?
We raised this question in an IREI article nearly one year ago (“Too much of a good thing? Supply risks in the U.S. Sun Belt”, September 2022, Institutional Real Estate Americas) as we analyzed demographic and real estate data with a particular focus on the post-pandemic period. In this article, we revisit our previous analysis and ask: Did the U.S. Sun Belt receive too much of a good thing with an abundance of new housing development?