According to new Yardi Matrix report, construction times are taking longer than historical norms
SANTA BARBARA, Calif., Dec. 04, 2017 – Longer-than-anticipated construction times kept new multifamily unit deliveries, once expected to peak in 2017, only slightly ahead of last year’s pace through three quarters of the year, per a new report recently released by Yardi® Matrix.
A shortage of skilled construction labor is the primary reason for the lagging deliveries, with the complexity of construction materials and structures and drawn-out government approval processes also contributing. “Longer construction periods for multifamily properties could have a substantial impact on the market. We now expect the cycle peak for deliveries to come in 2018 rather than 2017,” the report states, noting that more than 550,000 units are under construction in the U.S.
The report, “Multifamily Deliveries Slow as Worker Scarcity Increases Construction Times,” compiles data from more than two million apartment units built in more than 100 markets over the last decade.
In the four-year period ending with the third quarter of 2017, the increase in completion times was highest in California metros Orange County, East Los Angeles and San Jose. Construction times also lengthened in metros with huge development pipelines such as Charlotte, N.C., Miami, the western portion of Houston, Nashville, Tenn., Phoenix and Raleigh, N.C.
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