In this guest commentary, CoStar economist Luis Mejia looks at the pace of construction in central business districts, suburbs--and top spots in-between--and its possible effect on investment appetite.
Data from the past decade show the increasing popularity, and construction, of small units. But is the supply getting out of control?
Price per unit in primary markets is decelerating more quickly than in secondary markets.
Figures from the first half of the year show that two key apartment-transaction indicators are on the decline.
Older property cap rates remain on a downward trend, suggesting sustained interest in ready-to-renovate properties, while newer asset cap rates are leveling off, suggesting a possible concern that recent deliveries could be more strongly affected by the growing supply wave.
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