Eye On Housing
An elevated rental share of multifamily construction is holding typical apartment size below levels seen during the pre-Great Recession period.
According to fourth quarter 2019 data, the average per unit square footage of multifamily housing construction starts was 1,074, off from the post-recession high set at the start of 2015 (1,247 square feet). The median was 1,053 square feet for the final quarter of the year.
Because the quarterly data are volatile, it is worth examining the numbers on a one-year moving average basis. For the fourth quarter of 2019, the one-year moving average for multifamily size was 1,109 square feet, while the median was 1,075. The current moving-average of median size is 2% higher than the post-recession low, while the trailing average is now at a post-recession low.
The market share of rental multifamily construction starts increased to 94% during the fourth quarter of 2019. In contrast, the historical low share of 47% was set during the third quarter of 2005, during the condo building boom. An average share of 80% was registered during the 1980-2002 period. There were only 25,000 multifamily condo units that started construction over the last year, equal to the 2018 total.
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