In today’s competitive real estate market, developers need to be strategic and selective in the markets they choose for new multifamily developments. With changing demographics, economic trends, and varying demand for rental properties, careful consideration of location and market dynamics is crucial. While some markets may appear promising on the surface, a deeper dive may reveal oversaturation or unfavorable market dynamics. Read on.
Recently, several markets have experienced a surge in new multifamily projects, making it challenging for new developments to stand out and achieve optimal occupancy rates. Some top markets already saturated with multifamily developments include hotspots like New York City, San Francisco, and Los Angeles.
According to CBRE, the top five markets for new deliveries in the past four quarters were New York, Washington, D.C., Dallas, Austin (Texas), and Los Angeles. These markets accounted for 25% of the national total. CBRE also observed that there will be fewer deliveries starting in 2025 due to moderate construction starts.
Markets with the most construction deliveries saw the biggest declines in rent growth. Fewer construction starts in recent quarters will lower deliveries in 2025 and beyond.
What To Do:
Developers may want to explore alternative markets that offer growth potential and have a lower degree of saturation. By carefully analyzing the market dynamics and demand, developers can make informed decisions to avoid oversaturated markets and find untapped opportunities for their multifamily projects.
As long as the multifamily housing industry continues to evolve, BASE4 will be there.
BASE4 | Your Multifamily Partners
BASE4 plays a crucial role in the multifamily industry by providing innovative and efficient solutions for property developers and managers. We help developers, general contractors, and factories find better ways to build through innovative technology, forward-thinking design, and offsite manufacturing.
With the product-centered approach, we continually optimize the build process, building faster, cheaper, and more efficiently. We offer the service of helping developers determine the best development approach for a site.
We understand the market and are committed to helping developers and GCs navigate these challenging times. We believe in a PRODUCT mindset—bringing standardization and manufacturing principles to the AEC industry. Our team members are experts in design, with extensive design experience in every state. This ensures that we can deliver quality and speed-to-market solutions.