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Apartment Construction Pipeline Changes Drastically

Peak Now Coming in 1Q18

By Dave Sorter | Tuesday, November 7, 2017



All the talk about multifamily development being delayed for various reasons isn’t just conjecture. Since we last commented on the apartment construction pipeline in August, two significant changes in the statistics have occurred:

  • The cyclical peak for apartment deliveries is now the first quarter of 2018, as several properties have shifted their completion schedule. However, deliveries are still predicted to subside in the second half of next year, so 2017 still has more identified supply in the apartment construction pipeline than 2018.
  • New York is no longer the leading market for 2017 deliveries. Dallas and Houston both surpassed the Big Apple over the past three months – though all three markets’ 2017 supply were down from August. New York remains by far the leader in 2018 identified supply.

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Some 109,138 units have been identified for fourth-quarter 2017 delivery as of Oct. 29, down 8,728 from the Aug. 21 figures. Meanwhile, 109,324 units are now expected to deliver in the first quarter of 2018, some 13,746 more than were identified in our last update. From there, 2018 deliveries from the apartment construction pipeline should moderate, to a still-robust 93,784 in the second quarter; 65,670 in the third quarter; and 56,815 in the fourth quarter. 

Of course, all that could change. Winter weather can be particularly harsh on apartment – or any -- construction projects, particularly in the Northeast, Midwest and the mountain states.

On an annual basis, 356,037 units have been or will be delivered in 2017, according to the latest apartment construction pipeline figures. That’s 25,200 fewer than were identified in August. Meanwhile. Identified 2018 deliveries have increased by 44,454 in the past couple of months to 325,593, surpassing 2016 as the second highest completions year during this cycle.

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Meanwhile, the metro supply standings changed drastically from our last update. New York had been the No. 1 market for 2017 multifamily development since early 2016, when we started drilling down into this year’s supply data. But since August, roughly 5,000 units have transferred from 2017 into 2018. New York’s current 2017 delivery figure of 19,788 dropped it to third place, according to multifamily development pipeline statistics. 

And, no surprise, the two markets that climbed above New York are the metros that have dominated supply over the past four years: Dallas and Houston. Dallas leads the pack with 22,851 opened or opening this year, though that is still about 1,800 fewer units than were identified in August. Houston is second with 19,917 deliveries in 2017, about 200 fewer than the last update.

New York, though, has 28,395 new units identified for 2018 delivery, far above No. 2 Dallas (21,320) and No. 3 Los Angeles (15,014). Houston supply in the apartment construction pipeline is expected to drop considerably, with 5,347 new units identified for 2018 completion. However, that could change as the impact of Hurricane Harvey flooding on under-construction multifamily development is sorted out.

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Delays could alter the rankings further during the final two months of 2017. Stay tuned for further updates on the apartment construction pipeline.



Dave Sorter

Dave Sorter


Dave Sorter is an award-winning journalist who spent 30 years as a newspaper reporter and editor before joining Axiometrics. He oversees all Axio blogs and newsletters and serves as senior editor of all Axio publications.

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