ros, while we expect demand for 290,000 apartment units. Supply growth is led by the New York metro, Dallas, Washington D.C., Los Angeles, Denver and Miami, all of which have at least 25,000 units under construction right now. Metros projected to have the highest amount of new demand are New York, Los Angeles, Washington D.C., Houston and Miami. Metros in which supply is expected to exceed demand the most as a percentage of stock include: Deliveries in each of these markets over the next two years are at least 2.5 percent more than the amount of expected demand. These markets have largely performed well in recent years, but the supply/demand imbalance will put a strain on rent growth and occupancy rates. On the other side of the equation, metros in which demand is expected to exceed supply include: • Dallas • Phoenix • Miami • Denver • Seattle • Charlotte
Demand is expected to exceed supply in each of these metros by 1.0 percent or more. Fundamentals should remain strong in these markets, although affordability is constraining rent growth in many submar- kets in New York and Los Angeles. FIVE-YEAR PROJECTIONS Our numbers forecast 617,000 new apartment units in the top 30 metros over five years, with demand for 677,000 units. Deliveries in New York, Washington, Dal- las, Los Angeles and Miami encompass about 250,000 units, or 40 percent of the total new development. Metros with the most projected demand for apartments are New York, Los Angeles, Washington D.C., Chicago and Houston. Metros in which forecast supply exceeds demand the most as a percentage of stock includes: Seattle, Charlotte, Dallas and St. Louis. Metros which have the most favor- able demand/supply metrics include:
have some elasticity. Projects not yet under construction can and will be delayed if demand proves to be weak and occupancies and rents begin to slip. On the flip side, if demand exceeds supply, the timeline for many projects will speed up. Another caveat is that our demand methodology assumes that the percent- age of apartment renters will remain constant over the five-year period. If future residents occupy apartments at a different rate, that could affect demand in individual metros. SOCIAL TRENDS AFFECT DEMAND This study was based broadly on population growth and homeowner- ship trends. Other factors that impact demand for housing could change the direction of household formation. For example, the strong job market since 2010 has encouraged household formation, but that would change if the economy hits a downturn. Other demo- graphic and lifestyle trends include: • Whether job growth will be concentrated in urban areas with educated workers.
• Los Angeles • Inland Empire • San Diego
• Houston • Chicago
• Los Angeles • Inland Empire • Houston
• Sacramento • New York • San Diego
These projections come with some caveats. One is that long-term forecasts
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