Construction starts is the volume of multifamily units beginning construction in a given period. Leading indicator of supply delivery 18–36 months out.
Tracked by submarket, metro, and national levels. Declining starts today indicate reduced supply pressure 2–3 years from now. Rising starts indicate future supply-demand imbalance risk. Interest rates and construction costs are the primary drivers.
LA multifamily construction starts peaked in 2023 at record levels and have fallen 53% since, driven by higher rates, tighter lender underwriting, and elevated construction costs. This signals a thinner supply pipeline for 2027–2028 — supporting future rent growth after the current delivery wave absorbs.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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