We on the data provision side of things talk (and hear) a lot about the national supply peak, but the local figures are what really matters for those on the practitioner's side of the business. That isn't to discount the national narrative, but ultimately what's happening in your city is going to tell you more about the near-term than the nation at large. Macro and micro go hand in hand, after all.
So, when is the expected supply peak by market? As you'd expect, there's a pretty big range of results. Here are some general themes that stand out at first glance.
There are a dozen major U.S. metros that have already hit peak supply, and some of those markets may be surprising. While there isn't as consistent of a geographic theme here, some markets that have gone through quite remarkable local peaks are on their respective downwards slope. Salt Lake City is a great example of a market where peak construction activity accounted for more than 10% of all existing inventory, according to data from RealPage Market Analytics.
Chicago gets overlooked at times, but the urban supply wave delivering here is subsiding rather quickly. Peak supply in the urban core (4,100 units in 1st quarter 2024) falls to 2,800 units by that same time the following year. Chicagoland's suburbs meanwhile peaked in 2023 (though supply through at least 2025 should be more or less consistent with that 2023 figure).
There are more than a handful of markets quickly approaching peak supply. A particularly noteworthy cluster in the Southeast (generously grouping Central Florida in with Atlanta and Tennessee). South Florida and the Carolinas, however, have a few more quarters before peak supply arrives. Jacksonville and Nashville are worth mentioning as those two markets have had some of the most aggressive development pipelines on a percentage growth basis since the start of 2020s.
Seattle is another market worth watching, though delays may push this market's peak into 2025. Either way, new starts relative to deliveries suggests the peak is closer than it is further out.
About half the nation's biggest metros are at least another 6 to 12 months out from peak supply. Southern California features a clear cluster of markets. Orange County is perhaps a bit misleading because it’s a relatively modest local peak there. But factoring in delays, we could see urban Los Angeles push its supply peak well into 2026 (if not even early 2027).
Texas and the North Carolina trio are really going to test the depth of demand in the coming few quarters. Even with supply peaking in the first half of 2025, there may be a slower return to normal revenue growth levels here due to sheer volume. After all, supply's impact is cumulative over a multiple-year period.
New York could easily be the latest-to-peak market in the country based on its backloaded 2025 deliveries and unaccounted for supply. A few neighborhoods here may be looking at a long supply tail going into late 2027 (even 2028).