Dallas-Fort Worth ranks as the top U.S. market for new apartments in 2017 as the country reached a three-decade high — and market cycle peak.
And North Texas is expected to continue to be a top U.S. market for apartment development this year, said Greg Willett, chief economist for Richardson-based RealPage Inc. (Nasdaq: RP), which tracks and analyzes apartment data throughout the country.
“Between Dallas and Fort Worth, we completed about 32,520 apartments in 2017, it will come down a little bit to 25,485 for 2018 — but that’s still a lot of apartments,” Willett told the Dallas Business Journal. “It is still the most active metro in the United States by a big margin.”
Last year was a big year for U.S. apartment developers, which added 2.4 percent to the country’s apartment stock. In the United States, developers in the largest 150 metros increased the number of new apartments year-over-year by 46 percent to 395,775 apartments in 2017.
In recent years, Dallas-Fort Worth has been one of the hottest U.S. apartments markets. Willett said he expects that performance to continue as the region continues to add jobs and attract new residents.
“Our forecast is that occupancy comes down a little bit, about 30 basis points, with the rent growth number at 3.5 percent,” Willett said. “Even though we will build a lot in 2018, we have gotten past our peak and developers have done a better job of spreading out the deliveries in 2018.”
Last year, Dallas’ urban core and fast-growing suburbs, such as Frisco, Allen and McKinney, saw a flurry of new apartments deliveries, which stalled the rise in apartment rents in some markets. This year, developers will add Richardson, Carrollton, Irving and other cities to the mix.
New York ranked as the No. 2 U.S. metro for new apartments with 23,207 completions in 2017. Houston came in third place with 21,404 newly-built apartments.
Other metros, such as Washington, D.C., Atlanta, Los Angeles and Seattle delivered between 12,000 to 16,000 apartment units.
Willett said he expects Dallas-Fort Worth to be a leader in new apartment construction based on the momentum behind the region.
This year, he forecasts the region will add 75,000 to 80,000 jobs.
“I think we’re going to continue to be a really busy construction market,” he said. “At the same time, occupancy and rent growth has slowed down and I think we’ll come back to earth after years of being so strong.”
North Texas Commercial Real Estate Developers
Ranked by Local Commercial Space Developed in 2016 (in sq. feet)
Rank Business name Local Commercial Space Developed in 2016 (in sq. feet) 1 KDC Real Estate Development & Investments 4.25 million 2 Trammell Crow Co. 3.9 million 3 Hillwood 3.1 million View This List