Multifamily Developers Try to Keep Pace with Demand
January 26, 2022 | Bendix Anderson | WealthManagement.com
Developers are rushing to start construction on new apartments—and so far, the demand for new apartments seems likely to stay high enough to fill them.
Occupancy rates remain strong and rents are rising quickly for rental apartments. The biggest questions for developers are not whether enough renters will want to live in their proposed buildings. Instead many worry about whether construction delays will hurt their schedules or if rising costs will blow their budgets.
“Barring another ‘black swan’ event, there’s still a ton of pent-up demand for newly-built apartments,” says Jay Parsons, deputy chief economist for RealPage. “Investors continue to fund new developments, and we’re likely to see another sizable increase in starts in 2022.”
Many apartment developments that start construction today are likely to be leasing units within a year or two. Those apartments should continue to benefit from strong demand from renters.
