Dominion Financial’s Post

Prices are determined by supply and demand.” ― Hendrith Vanlon Smith Jr, CEO of Mayflower-Plymouth ''The U.S. is poised to reach new heights in apartment construction for the third year in a row, with 2024 expected to set a new record: By the end of the year, developers are on track to complete a staggering 518,108 rental units, marking a 9% increase compared to 2023 and a staggering 30% rise from 2022. What’s more, 2024 is the first year in the history of U.S. apartment construction in which the number of completions will surpass the 500,000-unit threshold. The New York metro is leading the charge for the third consecutive year, followed by Dallas and Austin. Notably, the Dallas and Austin metro areas together are expected to welcome roughly 10% of all apartments opened nationwide by the end of December. Looking ahead, 2 million apartments are set to come online by 2028, despite uncertainties in most markets that are causing fewer new projects to start. Furthermore, about 47% of the 369 metros analyzed are likely to build more in the next five years than they did from 2019 to 2023.'' https://lnkd.in/ezZ4DwMN

Apartment building purchases are slowing down due to a large supply of new units. Instead, developers are looking to renovate existing buildings to increase rental income. This shift towards renovations is expected to benefit construction companies in the next 6 months to 2 years. However, the overall construction industry is still waiting for a pick-up as transaction volume remains low. #Construction #Renovations #SupplyAndDemand

At the end of last year, developers began building just under 4,500 new apartments. That represents a drop of 42% in the number of new rental homes started compared to two years before. Real estate experts agree that rent prices should continue to drop as thousands of new apartments that builders began constructing during the boom become available to lease. While building has slowed, developers can't halt mid-project. https://lnkd.in/gvm2jjK4

Must read article for owners & operators in SA market. Top takeaways ⤵️ 1. “Current occupancy rate in San Antonio is just shy of 86%.” according to MRI Apt Data. (This likely includes lease-ups & stabilized assets, but as an indicator of available supply in SA it’s important to note.) 2. This is expected to continue through 2025. 3. Bruce Mcclenny, Industry Principal for MRI is concerned about declining job growth numbers in July in Texas. My advice: If you’re in multiple markets and SA is one of them, put 10x operational focus here from now until the end of the year to save Q1 2025. Here’s why: - Delinquency is going to be a bigger challenge than normal after the holidays this year. More Evictions = More Vacancy = Higher Concessions = Low Cashflow - Leasing slows down in Q4. In an oversupply market, the effect of this is compounded exponentially. I’ve always said if the 1st quarter is blown it takes the whole year down with it. Starting Q1 2025 strong in oversupply markets is especially critical to avoid fighting for scraps in the dog pile.

According to a new study from RentCafe, U.S. apartment construction is on track to reach a historic high this year, with over 500,000 new units expected. This represents a 9% increase from last year and a 30% surge compared to 2022. The study also projects that more than 2 million new apartments will be available nationwide by 2028. However, the pace of construction is anticipated to slow down between 2025 and 2027. #ApartmentConstruction #RealEstateTrends #HousingMarket #UrbanDevelopment #RentCafe #HousingBoom

Happy Wednesday! Did you know that apartment construction is hitting historic highs in 2024? Check out this insightful article by Veronica Grecu to learn more about the trends shaping our industry! Stay informed and engaged! #ConstructionNews #Wednesday #ApartmentTrends #Multifamily #Housing #Heritageccs https://lnkd.in/eCfXXg3y

Let’s talk real estate "Follow the cranes" is a phrase I often heard when I started exploring markets outside my local area. New construction typically signals a city's growth and rising demand for housing—whether for rent or purchase. However, large-scale developments can also impact rental income. Think back to Economics 101: when supply increases and demand remains constant, prices tend to decrease—and this is especially true when the absorption rate (the rate at which new supply is rented or sold) cannot keep up with the new supply. When new buildings are completed, developers often offer incentives, such as two months of free rent, to attract tenants. If you're considering buying an apartment building near new construction, it's essential to anticipate higher concessions (the incentives factored into your underwriting). If you already own an apartment building nearby, you should: 1) Proactively engage with your current tenants to ensure lease renewals—either by maintaining the current terms or offering incentives. The cost of vacancy (cleaning, preparing the unit, and possibly sitting idle for months) is often higher than offering a short-term price reduction. 2) Strategize your pricing to remain competitive against new developments. While newer units might be smaller than those in older buildings, tenants may be drawn to the amenities and incentives like "free rent." I've personally seen tenants move from one building to another simply for these perks. Real estate is a dynamic industry, and understanding these market forces—including absorption rates—can help you make better investment decisions. #RealEstateInvestment

Great article from the Star Tribune. High interest rates, construction costs, and restrictive regulatory environments are killing market rate development projects. Can the Twin Cities afford to slow down apartment development in an already under supplied market? How can cities and developers collaborate to make these projects feasible? #multifamilydevelopment #twincities

Here's the part of this article that gets me: "The majority of apartments that have been built in the past five years are high-end and primarily target upper-middle-class and upper-class renters. Renters in smaller regions may still have few inexpensive options due to the concentration of new apartments in the main U.S. metro areas and the emphasis on high-end residences." How many of these luxury loft complexes are going to end up getting squeezed for lack of demand and have to lower their rent anyways? Are they prepared for that?

🏙️ #Austin Housing Update🚧📉 Big news, Austin! 🎉 Our city has seen a construction boom like never before, making the dream of luxurious living more attainable. With rents decreasing, many are finding themselves in spaces they once thought were out of reach. 🌆💸 📉 Thanks to a surge in apartment constructions during the pandemic, rent prices are falling across the board - yes, even those older complexes! 🏗️🏠 But here's the twist: as building costs soar and interest rates spike, some developers are hitting the brakes on new projects. 🛑💰 💡 Did you know? Austin's population grew by nearly 100,000 in the first years of the pandemic, pushing demand for rental homes. But now, with more apartments available and rents becoming more affordable, it's a whole new landscape. 🌍📊 🔍 Insight: Real estate experts believe rent prices should continue to drop as the apartments built during the boom become available. However, the pace of new constructions is slowing. Will this trend reverse as building becomes less financially attractive? 🤔🔄 📣 What's your take, Austin? Have you noticed these changes in your neighborhood? Let's talk about the future of our city's housing. 💬👥 . . . #austintx #austintexas #construction https://lnkd.in/gjQ-uja6