Average Size of New Multifamily Units Rose at End of 2013

After rising during the boom years and falling during the Great Recession, the average size of newly built, multifamily units remains close to levels seen a decade ago. As multifamily developers build more for-sale housing units in the years ahead, the average size of multifamily units is likely to rise.

According to fourth quarter data from the Census Bureau, the average square footage of multifamily housing construction starts was 1,225. The median was 1,131.

MF size_4q13

Because the quarterly data are volatile, it is worth examining the numbers on a one-year moving average basis. For the third quarter, the one-year moving average for the multifamily size average was 1,181 square feet, while the median was 1,104. These measures are both approximately 5% higher than cycle lows.

However, these current metrics are very close to the typical data from the 2001-2003 period, when the average was 1,180 and the median was 1,093.

The typical size of a new multifamily unit is well below the averages/medians recorded during the boom years, when the share of for-sale multifamily was considerably higher. The share of multifamily housing starts built for-rent fell to a historical low of 47% during the third quarter of 2005. It is currently (90%) above the approximate 80% share recorded during the 1980-2002 period due to the rise in rental demand following the housing crisis.

MF built for rent_4q13

Thus, the reason for some of the recent change in multifamily average size is due to market mix. Renters tend toward smaller units than owner-occupiers. In 2012, for example, the median size of all multifamily units completed was 1,098 square feet. However, for rental apartments the median was 1,081, while it was a larger 1,466 for condos.

As the for-sale share of multifamily returns back to historical norms in the years ahead, the size of a typical newly built multifamily housing unit will rise as well.

3 Responses to Average Size of New Multifamily Units Rose at End of 2013

  1. […] size of typical multifamily units also increased, albeit off of cycle lows set in 2012. Apartment sizes can be expected to increase in the years […]

  2. […] The average size of newly-built multifamily units rose at the end of 2013; that’s after rising during the years of the housing boom, and falling during the Recession. During the fourth quarter of last year, the average square footage in multifamily housing construction starts was 1,225 (that’s according to the Census Bureau). These numbers look a lot like those we saw between 2001 and 2003. While the average size of a new unit is still far below the averages we saw during the housing boom, these unit sizes are now sitting high above the historic low we saw in 2005. Read more. […]

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