A record-setting year of construction in the multifamily sector? That’s what Berkadia is predicting in its 2023 national apartment forecast.
According to Berkadia’s forecast, the United States will see about 565,200 new apartment units come online in 2023. There’s a reason why that sounds like a lot: If this prediction holds true, it will mark the highest number of annual apartment unit deliveries in the country in more than 20 years.
Part of the reason for what looks to be a record-setting year? The COVID-19 pandemic. As Berkadia reports, the pandemic slowed new construction and caused many developers to delay their multifamily projects. Many of these apartment projects will be delivered this year.
Berkadia pointed to the Dallas and Austin markets in Texas as being especially busy when it comes to the delivery of new apartment units this year.
And don’t expect all these new deliveries to send vacancy rates soaring. Berkadia is predicting that the national apartment occupancy rate will settle in at 95% in the fourth quarter of 2023. That’s higher than the pre-pandemic occupancy rate that averaged 94.7% from 2010 to 2019.
Monthly rents should remain high, too. Berkadia is predicting that the average effective monthly apartment rent will hit $1,827 this year. That’s up 3.3% on a year-over-year basis.
In the Midwest, Berkadia pointed to Nashville, which should see its apartment inventory jump by 8% in 2023. Austin, Texas, should see its apartment inventory increase by 7.9%, according to Berkadia.
Midwest cities in which monthly apartments rents are expected to grow quickly, include Columbus, Louisville and Indianapolis, all of which should see multifamily rents jump 3.8% on a year-over-basis in 2023, according to Berkadia.
