Supply Pressure Beginning to Ease
Supply Pressure Beginning to Ease
A much-awaited slowdown in new supply has begun to play out for Greater Dallas multifamily this year. A simultaneous jump in net absorption has allowed the market to outperform expectations so far in 2025. With the traditionally weaker leasing season now ahead, new deliveries will continue to have a strong impact on industry performance.
Recent Supply Down from Peak
Just more than 17,000 new units have been delivered across Greater Dallas over the last twelve months ending in August. That was down from more than 22,000 new units delivered in the previous twelve months. The approximately 11,000 new units introduced from January through August was the lowest total for that portion of the calendar since 2022.
The recent slowdown has been felt across the market. New supply exceeded 1,000 units in five of thirty-one ALN submarkets over the last year. In the prior period, eight submarkets topped that threshold. Likewise, thirteen submarkets have seen no new units delivered in the last twelve months. In the previous twelve-month period, there were only five such areas.
Of course, fresh supply is only one part of new supply already impacting the market. The other is recent supply that remains in a lease-up phase. More than 37,000 units finished August in some stage of lease-up. For context, those units equal 6% of conventional stock for Greater Dallas. There were more units in lease-up than under construction at the end of August.
This dynamic is a reminder that new supply will continue to play a prominent role in Greater Dallas multifamily after the spigot of new units has been significantly winnowed. Units currently in lease-up equal roughly three years of robust net absorption for Greater Dallas.
Units Under Construction Moderately Lower
Just more than 28,000 units under construction and yet to start leasing were being tracked by ALN by the end of August. This was mostly unchanged from the end of the first quarter. As recently as early last year, there were almost 40,000 units under construction across the market. For the first time in a few years, more projects are completing than are breaking ground.
The Frisco – The Colony – Little Elm portion of Greater Dallas will continue to be the epicenter of upcoming deliveries. Approximately 7,800 units were under construction there at the end of August. The Plano East – North Richardson part of the market had the second most with about 3,700 units under construction. Rounding out the top three was the McKinney – Allen – Fairview submarket with around 2,600 units under construction. Half of all units currently being built in Greater Dallas are in just those three submarkets.
15 ALN submarkets for the area had fewer than 1,000 new units under construction. As the pipeline begins to winnow, the geographic range of the activity looks set to winnow as well.
Of the roughly 28,000 units currently under construction, around 7,800 are expected to begin leasing before the end of the year. That would bring annual deliveries to about 19,000 units – fewer than last year but still high. With 2026 set to open with at least 20,000 units under construction, the deliveries pipeline will not be completely shutting off.
Takeaways
New supply, while still a major component of market performance, has started its descent from a 2024 peak. At the same time, apartment demand has continued on its multi-year growth trend and has actually gained some further momentum.
Uncertainty remains in the broader economy, and warning signs are emerging, but the Greater Dallas multifamily market should have some extra cushion over the next year or more as the deluge of new supply from recent years moves into the rearview mirror.
*Jordan Brooks is Director of Market Analytics at ALN Apartment Data. https://www.alndata.com
ALN is the largest collector of apartment data in the United States. We update property-level information monthly, reporting on properties nationwide, and provide our clients with data analytics, new construction projects, histories, occupancy and rental trend reports, contact databases and locating services.