Multifamily Construction Times Slow In Raleigh, Other Hot Markets
Between Q3 2013 and Q3 2017, construction time for multifamily development in Raleigh-Durham was up 7.5 months, the report found.
A shortage of skilled construction labor is the primary reason for the lagging deliveries, with the complexity of construction materials and structures and drawn-out government approval processes also contributing.
“Longer construction periods for multifamily properties could have a substantial impact on the market," the report said. "We now expect the cycle peak for deliveries to come in 2018 rather than 2017."
The report, titled Multifamily Deliveries Slow as Worker Scarcity Increases Construction Times, was written by Associate Director of Research Paul Fiorilla. It compiles data from more than 2 million apartment units built in more than 100 markets over the last decade.
In the four-year period ending with the third quarter, the increase in completion times was highest in California metros Orange County, East Los Angeles and San Jose. Construction times also lengthened in metros with large development pipelines, including Raleigh-Durham, but also Charlotte, Miami, the western part of Houston, Nashville and Phoenix.
Year-to-date, the total number of units scheduled to deliver in the Raleigh market reached 3,617, and was 1,951 units in the Durham-Chapel Hill market, Colliers International reported separately in its Q3 report on the market. Total units delivered during the quarter was 939 in Raleigh and 466 units in Durham-Chapel Hill.