The slow pace of construction, staff shortages, and construction bans that came with COVID-19 have reduced housing construction by 12%, according to a new report.
283,000 new housing units are expected to hit the market this year, which is far less than a high in 2018, according to the report from RENTCafe Blog.
The downward trend is beginning to reflect the success of the 2008 economic crisis. This emerges from the article by Florentina Sarac: "Housing construction in 2020 at 5-year low at national level, down 12% from the previous year."
The report is based on data from Yardi Matrix, which included information on large residential buildings of 50 or more units. There were 321,000 units in 2019, but this year it will only be 283,000.
"The downward trend is mainly due to slower construction pace due to a lack of available construction teams, funding and permits, as well as some temporary bans on construction projects in certain states," Sarac wrote. “2020 was a difficult year for the housing industry. More than half of the developers reported delays in construction due to the pandemic. "
Although fewer new complexes are emerging in many metropolitan areas in the United States, there are some cities that are bucking the trend. Texas is a prime example: three of its cities are on the top 5 new housing list this year.
In the Dallas-Fort Worth Metroplex in Texas, for example, most of the new homes will be on display: more than 19,000 units. Next up is New York with an estimated nearly 16,000 units. Houston is the third largest city and will receive more than 10,400 housing units this year. The Atlanta subway is also high on the list with 10,200 new apartments. Fifth is Austin, which is expected to receive more than 9,300 new units.
"Another indication of how slow the construction work has been this year: 13 of the 20 most active major metros are expected to complete fewer units than last year, while only seven metros are expected to build more," the report said.
Another example, the Miami area, has seen the largest 53% decline in new home construction. Denver is down 51%.
When the apartments were completed in the first half of 2020, cities in Texas dominated. Austin and San Antonio lead the pack for housing completion during this period. Denver, Charlotte, North Carolina, and Brooklyn also did well on the completed housing metric.