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For the past two years, landlords across the country have been grappling with a surge of new units, thanks to the largest apartment construction boom in four decades. Now, the market is starting to stabilize, The Wall Street Journal reports.
The vacancy rate stopped rising for the first time in three years last quarter, as demand for apartments rose to its highest levels since 2021, according to CoStar. It appears that the more than 1.2 million new apartment units built over the past two years are filling up.
Some 672,000 new apartment units will have been completed by the end of this year, but only about half that number is expected in 2025, and even fewer in 2026, CoStar said.
The Capital Region is in the midst of an apartment boom. In a report earlier this year prepared for the Commercial Investment Division of the Greater Baton Rouge Association of Realtors and the Baton Rouge Apartment Association, researchers noted that a historically significant number of new apartment units currently under construction were expected to hit the market through the end of 2024 and in 2025, with even more units planned.
From 2015 to 2024, a total of 13,930 units were either built or are currently in the process of being built in the Capital Region, which the researchers concluded equates to 1,393 units per year. That pace is roughly 60% greater than during the preceding decade, according to the report, which included the post-Katrina construction boom.
The report cautioned that owners and apartment managers should continue to brace for competition as those new units compete for tenants.
Read the full national story from The Wall Street Journal. Read the Capital Region trend story in Business Report.
