New Supply Set to Slow in 2025 but Not Drastically
The elevated volume of new supply that was delivered across Greater Fort Worth this year continued to be a major driver of industry performance. An unrelenting new construction pipeline has applied downward pressure on market-level occupancy since the end of 2021. New supply in 2024 is likely to be the peak for this development cycle, but deliveries next year are still expected to be higher than in 2021 and 2022.
All numbers will refer to conventional properties of at least fifty units.
Recent New Supply
Through November of 2024, roughly 9,800 new units were delivered across the market. This was only slightly more than last year’s approximately 9,600 new units through the same portion of the calendar but was well above the longer-term average. This year’s new supply has been more than in any year of the last two decades and more than doubled the annual average for that period.
Of course, the brunt of new supply has not been felt evenly. Almost half of new units this year were introduced in just two submarkets. About 2,500 new units in the Denton – Corinth region accounted for 25% of new supply. Approximately 2,300 new units in the North Fort Worth submarket represented 23% of new supply through November. Other notable areas included the Central and South Fort Worth submarkets – each of which added just more than 1,300 new units.
The remaining eight ALN submarkets for Greater Fort Worth added fewer combined units than the Denton – Corinth submarket. Looking ahead to next year, the dynamic is expected to change some in terms of the distribution of new units across the market.
Upcoming New Supply
More than 12,000 units were under construction across Greater Fort Worth at the end of November with expected least starts for 2025 at about 8,000 units. Should that total roughly hold, 2025 new supply would be lower than in 2023 and 2024 but would still be higher than in any other recent year aside from potentially 2020. In 2020, just more than 8,000 new units were delivered – making it the closest analogue for supply expectations in 2025.
As mentioned already, there could be some changes at the submarket level in new supply between 2024 and 2025. Both the North Fort Worth and Denton – Corinth areas remain at the top of the rankings for the number of units under construction. However, the East Fort Worth submarket had the third most units while the Central Fort Worth region fell from number three in deliveries in 2024 to number five in units under construction.
The Arlington portion of the market should also be more active next year for new supply. Both the Central and South submarkets in Arlington had more than 1,000 units under construction to end the period. Each added fewer than 500 new units through November of this year.
There were an additional 32,000 or so units in a pre-construction phase heading into December. These are projects that are expected to break ground within twenty-four months. However, delays or cancellations are possible and have generally been on the rise this year. For near-term new supply, within the next two years or so, the portion of the pipeline that is currently under construction provides a clearer picture.
Takeaways
As with many Sunbelt markets, new supply has played a dominant role in industry performance over the last few years for Greater Fort Worth. Net absorption has increased significantly after bottoming out in 2022, but even so, new units delivered have outpaced net absorbed units by more than 15,000 units since the start of 2022.
New supply will continue to be a force next year despite a projected slowdown relative to 2024. There should be some decline in deliveries from this year’s peak, but 2025 is set to be another year at the high end of the range established over the last decade. If apartment demand continues to improve as it has over the last couple of years, 2025 has a chance to be the first year since 2021 in which net absorption surpasses new units delivered.
Jordan Brooks
Senior Market Analyst – ALN Apartment Data
Jordan Brooks is a Senior Market Analyst at ALN Apartment Data. In addition to speaking at affiliates around the country, Jordan writes ALN’s monthly newsletter analyzing various aspects of industry performance and contributes monthly to multiple multifamily publications. He earned a master’s degree from the University of Texas at Dallas in Business Analytics.
