Oversupply is Just Around the Corner via Axiometrics

Right around the time during which apartment developers began delivering more units to meet apparently unending demand, the concern was whether the excess supply would result in too much supply. According to Axiometrics Inc.’s just-released January 2014 Apartment Market Summary, that oversupply could be starting to occur.

The report notes that increasing supply has caused reduction in apartment occupancy and effective rent growth, especially in urban core areas. “As 2014 begins, concern remains about which Metropolitan Statistical Areas (MSAs) will become oversupplied as new supply outpaces demand,” Axiometrics stated in the introduction to the report.

The fact that the effective growth rate was 2.8% in January and the occupancy rate was 94.1% shows that the apartment market is not growing at the rate it had been even a year ago.

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