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Dallas is on the list of cities where apartment builders may be overdoing it.
Apartment construction in the Dallas area will far outpace demand, according to a new report by Yardi Systems Inc.
The number of new apartments opening in the next two years in Dallas will be almost three times the projected demand, according to Yardi’s new forecast.
More than 45,000 apartments are expected to open in the area during the next two years.
"In the near term, markets at risk of oversupply include Denver, Seattle, Charlotte, Dallas, Phoenix and Miami, where deliveries are expected to outpace demand," Yardi analysts said. "Over the longer term, the supply picture is more balanced.
"We expect construction will moderate after the more than 600,000 units currently under construction are completed" across the U.S., according to Yardi’s new report. "Most of the metros that are at short-term risk of oversupply have strong economies and healthy multifamily demand, so units coming online should be absorbed by growing populations. Plus, developers will pull back the throttle if occupancy rates wane much. "
Dallas is the top apartment building market in the country, with more than 30,000 units currently being built.
Because of the wave of building, apartment rents in North Texas are now rising at the lowest pace in years.
But vacancy rates remain low in the area due to almost 120,000 new jobs created in the Dallas-Fort Worth area in the last year. And the strong employment gains have brought thousands of new renters to the area.
Yards predicts that Dallas’ apartment supply will grow by more than 6 percent in the next two years while demand will only increase by 2.2 percent.