No, it’s not Seattle. Denver is by far #1. New York isn’t even in the top 25. And it explains why rents in Chicago are collapsing.

We’re going to shake up the status quo of apartment construction reporting. First, we’re going to lay out the status quo – the classic way of looking at this, the way you typically see it, where the New York metro comes out invariably as #1.

And then we’re going to look at it by population size of the metro, for metros with over one million people. And boy, do we get surprises.

For the past few years, there has been a multi-family construction boom across the US. About 283,000 new apartments are expected to be completed by the end of 2018, just a bit below last year when apartment deliveries hit a 20-year record of 317,872 units.

Over the three years 2016-2018 – this eliminates some of the year-to-year volatility – deliveries are projected to hit 910,000 apartments, according to RentCafé, a division of Yardi. This will be the highest three-year total since the all-time record of 1983-1985 (933,000).

“As the market is approaching a saturation point, 2018 may mark the start of a construction cooldown for the next few years,” according to RentCafé.

Boom and bust: In the chart below, note the multi-year 75% collapse of deliveries following the red-hot boom of the mid-1980s (click to enlarge):

The chart below shows the top 20 Metropolitan Statistical Areas (MSAs, large multi-city agglomerations as defined by the Census Bureau) in terms of total projected apartment supply. The New York metro is undisputed #1 with 19,948 apartments to be delivered this year:

This is the classic look. It always shows some of the largest US metros near the top, with New York as #1. Part of the reason they rank so high is because they’re very large. The New York metro – officially “New York-Newark-Jersey City, NY-NJ-PA” – has 20.3 million inhabitants as of 2017 Census estimates. The metro of Los Angeles-Long Beach-Anaheim has 13.4 million inhabitants. Dallas-Fort Worth-Arlington has 7.4 million folks. But Denver-Aurora-Lakewood has only 2.9 million folks — yet it’s #3 even on this list. That set us a-thinking….

So I added the population figures from the Census Bureau to the mix, along with the estimated apartment deliveries for 2018 from the Yardi Matrix data. The result is the number of apartments to be delivered per 100,000 inhabitants. And suddenly a different picture emerges.

The chart below shows only metros with a population of over 1 million, sorted by apartment deliveries per 100,000 inhabitants. This is my list of the 25 biggest apartment-construction booms.

New York metro disappears from this list, with only 98 apartments to be delivered per 100,000 inhabitants

Denver metro is by far #1 with 526 apartments to be delivered per 100,000 inhabitants

Austin metro is #2 with 418 apartments to be delivered per 100,000 inhabitants.

Seattle metro, the often-cited queen of the apartment construction boom, is #8.

The five-county San Francisco metro is #21.

One metric is missing from these dynamics: population growth or shrinkage. And it makes a difference. Look at Chicago.

The Chicago metro is in 25th place, with 10,700 apartment deliveries expected in 2019, for a population of 9.53 million. And this is a problem.

The Chicago metro has lost 27,000 people since its population peak in 2014 (9.56 million). In late 2015, asking rents peaked. Since then, with new apartment supply flooding the metro every year, and with the population shrinking at the same time, the median asking rent for a one-bedroom apartment has collapsed by 27% and for a two-bedroom by 32%.

An apartment boom that runs into a declining population ends with rents collapsing. This is a particular threat to the most expensive metros, such as San Francisco, where many people are fleeing the high costs of living every year. Only new influx from the US and overseas, mostly Asia, keeps the party going. But if there is a hiring slowdown, San Francisco too will experience population decline – which it does during every bust as people are fleeing to cheaper pastures, and the influx suddenly stops, and rents come down. Boom and bust. Always.

The table below shows the largest 99 MSAs in order of apartment deliveries per 100,000 inhabitants. But this list includes much smaller metros than the chart above. For example, New York metro with 20.3 million people and nearly 20,000 apartment deliveries is #58 on this list, just below the metro of Fort Wayne, IN, with 435,000 souls and 433 apartment deliveries, or 100 deliveries per 100,000 inhabitants. You can use the search function in your browser to find specific MSAs:

MSAs Population Apt. Supply Per 100K Pop. 1 Denver-Aurora-Lakewood, CO 2,888,227 15,187 526 2 Austin-Round Rock, TX 2,115,827 8,837 418 3 Nashville-Davidson–Murfreesboro–Franklin, TN 1,903,045 6,684 351 4 Logan, UT-ID 138,002 438 317 5 Tallahassee, FL 382,627 1,173 307 6 Salt Lake City, UT 1,203,105 3,339 278 7 Wilmington, NC 288,156 794 276 8 Durham-Chapel Hill, NC 567,428 1,485 262 9 Raleigh, NC 1,335,079 3,383 253 10 Dallas-Fort Worth-Arlington, TX 7,399,662 17,132 232 11 Charleston-North Charleston, SC 775,831 1,789 231 12 San Jose-Sunnyvale-Santa Clara, CA 1,998,463 4,533 227 13 Seattle-Tacoma-Bellevue, WA 3,867,046 8,614 223 14 Corpus Christi, TX 454,008 1,006 222 15 Phoenix-Mesa-Scottsdale, AZ 4,737,270 10,302 217 16 Reno, NV 464,593 994 214 17 Spokane-Spokane Valley, WA 564,236 1,207 214 18 Charlotte-Concord-Gastonia, NC-SC 2,525,305 5,169 205 19 Boulder, CO 322,514 642 199 20 Portland-Vancouver-Hillsboro, OR-WA 2,453,168 4,804 196 21 Columbus, GA-AL 303,811 541 178 22 Boise City, ID 709,845 1,260 178 23 Des Moines-West Des Moines, IA 645,911 1,130 175 24 Fort Collins, CO 343,976 600 174 25 Jacksonville, FL 1,504,980 2,576 171 26 Gainesville, FL 284,687 487 171 27 Provo-Orem, UT 617,675 1,048 170 28 Olympia-Tumwater, WA 280,588 476 170 29 Milwaukee-Waukesha-West Allis, WI 1,576,236 2,627 167 30 Atlanta-Sandy Springs-Roswell, GA 5,884,736 9,547 162 31 Asheville, NC 456,145 730 160 32 Miami-Fort Lauderdale-West Palm Beach, FL 6,158,824 9,790 159 33 Madison, WI 654,230 1,023 156 34 Cape Coral-Fort Myers, FL 739,224 1,145 155 35 Columbus, OH 2,078,725 3,209 154 36 Orlando-Kissimmee-Sanford, FL 2,509,831 3,857 154 37 Washington-Arlington-Alexandria, DC-VA-MD-WV 6,216,589 9,516 153 38 Omaha-Council Bluffs, NE-IA 933,316 1,425 153 39 Baltimore-Columbia-Towson, MD 2,808,175 4,117 147 40 Mobile, AL 413,955 599 145 41 Waco, TX 268,696 384 143 42 Pensacola-Ferry Pass-Brent, FL 487,784 695 142 43 San Antonio-New Braunfels, TX 2,473,974 3,501 142 44 San Francisco-Oakland-Hayward, CA 4,727,357 6,647 141 45 Greenville-Anderson-Mauldin, SC 895,923 1,215 136 46 Tampa-St. Petersburg-Clearwater, FL 3,091,399 4,176 135 47 Louisville/Jefferson County, KY-IN 1,293,953 1,660 128 48 Albany-Schenectady-Troy, NY 886,188 1,124 127 49 Little Rock-North Little Rock-Conway, AR 738,344 914 124 50 San Diego-Carlsbad, CA 3,337,685 4,086 122 51 Chicago-Naperville-Elgin, IL-IN-WI 9,533,040 10,713 112 52 Houston-The Woodlands-Sugar Land, TX 6,892,427 7,646 111 53 Grand Rapids-Wyoming, MI 1,059,113 1,157 109 54 Indianapolis-Carmel-Anderson, IN 2,028,614 2,203 109 55 Chattanooga, TN-GA 556,548 591 106 56 Boston-Cambridge-Newton, MA-NH 4,836,531 5,004 103 57 Fort Wayne, IN 434,617 433 100 58 New York-Newark-Jersey City, NY-NJ-PA 20,320,876 19,948 98 59 Minneapolis-St. Paul-Bloomington, MN-WI 3,600,618 3,520 98 60 Stockton-Lodi, CA 745,424 716 96 61 Ann Arbor, MI 367,627 353 96 62 Augusta-Richmond County, GA-SC 600,151 576 96 63 Baton Rouge, LA 834,159 800 96 64 Worcester, MA-CT 942,475 871 92 65 Santa Maria-Santa Barbara, CA 448,150 399 89 66 Cleveland-Elyria, OH 2,058,844 1,781 87 67 Los Angeles-Long Beach-Anaheim, CA 13,353,907 11,449 86 68 Lansing-East Lansing, MI 477,656 400 84 69 Savannah, GA 387,543 318 82 70 Syracuse, NY 654,841 532 81 71 Colorado Springs, CO 723,878 570 79 72 Knoxville, TN 877,104 684 78 73 Richmond, VA 1,294,204 1,001 77 74 St. Louis, MO-IL 2,807,338 2,088 74 75 Kansas City, MO-KS 2,128,912 1,569 74 76 Greensboro-High Point, NC 761,184 556 73 77 Las Vegas-Henderson-Paradise, NV 2,204,079 1,597 72 78 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 6,096,120 4,368 72 79 Deltona-Daytona Beach-Ormond Beach, FL 649,202 453 70 80 Sacramento–Roseville–Arden-Arcade, CA 2,324,884 1,592 68 81 Buffalo-Cheektowaga-Niagara Falls, NY 1,136,856 755 66 82 Winston-Salem, NC 667,733 403 60 83 Wichita, KS 645,628 381 59 84 Pittsburgh, PA 2,333,367 1,326 57 85 Oxnard-Thousand Oaks-Ventura, CA 854,223 456 53 86 Virginia Beach-Norfolk-Newport News, VA-NC 1,725,246 910 53 87 Oklahoma City, OK 1,383,737 714 52 88 Columbia, SC 825,033 418 51 89 Cincinnati, OH-KY-IN 2,179,082 1,093 50 90 Birmingham-Hoover, AL 1,149,807 566 49 91 Bridgeport-Stamford-Norwalk, CT 949,921 450 47 92 New Orleans-Metairie, LA 1,275,762 602 47 93 North Port-Sarasota-Bradenton, FL 804,690 349 43 94 Memphis, TN-MS-AR 1,348,260 568 42 95 Fresno, CA 989,255 405 41 96 New Haven-Milford, CT 860,435 306 36 97 Riverside-San Bernardino-Ontario, CA 4,580,670 1,515 33 98 Detroit-Warren-Dearborn, MI 4,313,002 1,319 31 99 Hartford-West Hartford-East Hartford, CT 1,210,259 339 28

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