Redfin: New Apartments Filling Slowly

(Image courtesy of Redfin; Breakout image courtesy of Element5 Digital)

Redfin, Seattle, released a report highlighting that newly built apartments are filling up at the slowest pace since the first quarter of 2020.

In 2023, 60% of the apartments completed in the previous fourth quarter were rented within three months. This year, only 47% were rented.

Redfin noted that there’s a near-record influx of apartments hitting the market, with 90,260 completed in the fourth quarter. That’s the second highest number on record after the second quarter of last year.

The rental vacancy continues to hover around 6.6%, the highest level since 2021.

Builders have started to slow on building starts, but completions remain near their record high, due to all the projects begun during the pandemic.

In terms of pricing for the recently completed units coming online, the median asking rent for newly built studio apartments fell 20.9% year-over-year in the first quarter, and new one-bedroom units saw an 11.9% decline. New two bedroom apartments dropped by only 1.2%, but new three-bedroom-plus units were up 9.1%.  

However, the median apartment asking rent was up 0.8% year-over-year in May.

“If you’re looking for a rental and you’ve noticed a lot of new apartments popping up in your neighborhood, it may mean you have room to negotiate on price or ask for concessions like discounted parking or a free month’s rent,” said Redfin Senior Economist Sheharyar Bokhari. “But if you live in an area where the supply of new apartments is limited, deals may be harder to come by. Building more housing is a tried and true way to ease the housing affordability crisis, and with rent and home prices at historic highs, local and federal leaders should continue to encourage more construction.”