According to an article recently published in the Herald Tribune, both investors and real estate professionals are anxious about the current state of the multifamily inventory.

One apartment developer with over 200 new rentals in the downtown area is happy that their community is in full swing and renting out at a higher rate than they had initially predicted. Unfortunately, a new 171-unit project has recently announced that they will be opening their community in the same area and it’s since caused investors to become a little on edge. They fear that the apartment construction industry might be outpacing the current demand.

The owner of Greco, a real estate development firm in Minneapolis, Minnesota added to the conversation telling the Tribune, “There is a lot of product being delivered in the next 12 months, a lot. I’m always worried about being the last one at the trough.”

With an industry wide drop in vacancy rates and an overwhelming surge in the demand for apartments, the Minneapolis market alone has over 7,000 units under construction and almost 14,000 new multifamily units proposed.

In the Florida market, developers have experienced the opposite problem as they have been trying to fulfill the demand on the multifamily market that has recently seen former homeowners, who lost properties as a result of foreclosure, entering the rental market alongside the regular influx of young adults and recent college graduates.

A look at the nationwide industry, developers are in the process of building over 260,000 units which is a boost of 20,000 additional units compared to anytime since the recession hit.

Such a rapid pace looks to have no end in areas like Austin, Dallas, Seattle, and even Denver.

As a matter of fact, the Denver market has just under 13,000 units currently under construction and almost 20,000 more units being planned for the very near future.

One problem that might be causing informed investors anxiety is the fact that so many people are paying attention to the markets demand, but not paying as close attention to tracking the supply.

One of the biggest proponents of the construction boom is the fact that we’re seeing a real abundance of new financing being available to those multifamily buyers and developers. The fact that we’ve had several years of minimal building has allowed for the new inventory to be absorbed at a rate that is better than anticipated.

Senior vice president of KeyBank Real Estate Capital, Clay Sublett, credits what he calls a “confluence of demand” in that the “Millennial generation” has hit the prime renters age of between 20-34 at the same time empty nesters are looking to downsize their living situation, while strict mortgage underwriting and the increasing interest rates have forced everyone else to look to renting as their only viable solution.

The anxiety investors and developers are feeling might also be attributed to the lingering possibility that the anticipated demand of these young renters might be “shallower” than expected as research shows that 36% of their target group is choosing to remain living at home with their parents out of sheer affordability.

How do you see the current multifamily market? Do you feel the supply will meet the demand or are we overbuilding?