Apartment Supply and Demand Growing

Written June 4th, 2014 by

Demographics are favorable for renters, as the 20-34 age group is growing in the US.  However, supply is also picking up, balancing out the increased supply.  As a result, vacancy may be bottoming out.  Here is a great article on Calculated Risk that shows the data.

The 20-34 year old age group is a key group of renters.  As can be seen from the below graph, the population for this age group has been growing, and is predicted by the census to continue growing through 2020.  This is great news for apartment demand!

On the flip side, supply is also increasing, with 250k-260k completions planned this year, and more in the coming years.  This may balance the increased demand, suggesting vacancies may be bottoming out.  Table from Calculated Risk below:

Year Completions Starts
1990 297.3 260.4
1991 216.6 137.9
1992 158.0 139.0
1993 127.1 132.6
1994 154.9 223.5
1995 212.4 244.1
1996 251.3 270.8
1997 247.1 295.8
1998 273.9 302.9
1999 299.3 306.6
2000 304.7 299.1
2001 281.0 292.8
2002 288.2 307.9
2003 260.8 315.2
2004 286.9 303.0
2005 258.0 311.4
2006 284.2 292.8
2007 253.0 277.3
2008 277.2 266.0
2009 259.8 97.3
2010 146.5 104.3
2011 129.9 167.3
2012 157.6 233.9
2013 186.2 293.7
20142 240.0 334.0
1 5+ units is close to the number of units built for rent each year.
2 Pace through April 2014, completions will probably be above 240,000 for 2014

Read more at http://www.calculatedriskblog.com/2014/05/apartments-supply-and-demand.html#AktYzVEQiqTL2EWF.99

 

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