by Eric Hawthorn
Today we’re looking at the U.S. CRE markets with the most real estate under construction, as a percentage of total inventory. This ranking comes from data collected by CBRE and published in the ULI/PwC Emerging Trends in Real Estate 2014 (here’s the link to the pdf; the graph in question is on page 28). Here are the Top 10 U.S. Markets for New Construction:
10. Seattle, Washington
9. San Jose, California
8. New York City, New York
7. Raleigh/Durham, Texas
6. San Antonio, Texas
5. Washington, DC
4. Northern New Jersey
3. Dallas/Fort Worth, Texas
2. Virginia Beach/Norfolk, Virginia
1. Austin, Texas
I want to take a look at another piece of info that precedes this information in the PwC/ULI report. Here are lists of the major U.S. markets with investment prospects considered “good or better,” reflecting industry sentiment from 2011 to now:
The graphic above shows how the real estate recovery has unfolded from 2011 up to the present. Soon after the recession, there were only two cities in the entire country with strong real estate fundamentals and investment potential. This changed significantly in 2012, and the recovery seems likely to speed up a great deal for even more real estate markets in 2014.
Interestingly, only half of the markets with investment prospects that are good or better appear on the ranking above of markets with a high percentage of inventory under construction. There are a few reasons for this; one is simple density. San Francisco, for instance, is a booming real estate market driven by its thriving technology sector, but the Bay Area is so densely built and densely populated that the area is running out of space for new inventory. For this reason, San Francisco’s construction rate is only a little bit higher than the national average, even though property values far exceed those of other cities.
Source: http://llenrock.com/blog/top-10-most-under-construction-u-s-real-estate-markets/
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