A healthy volume of new supply will start hitting the streets this year.
Given the two-year lead time on new construction projects, and the fact that construction lenders awoke from recessionary slumber roughly two years ago, the flood gates are starting to crack open.
Dallas-based Axiometrics is currently tracking close to 1.4 million units in varying stages of the construction pipeline, across 328 metro statistical areas (MSAs) and 833 submarkets. Of this total, the firm expects more than 164,000 units to deliver during 2013, nearly double the number delivered in 2012.
But all markets are not created equally—52,102 units, or one-third of the total number coming online this year, are concentrated in only six MSAs: Washington, D.C., New York, Seattle, and Dallas, Houston, and Austin, Texas. And if one factors in the total number of units under construction but not scheduled for delivery until 2014 or later, the number swells to more than 308,000 units on the way.
Yet, the growing pipeline isn't expected to put too much of a dent on rent growth. In its latest analysis, New York-based market research firm Reis, is forecasting 4.3 percent rent growth in 2013, and another 4.5 percent in 2014, when more than 171,000 units are expected to be delivered.