By Jorge Casuso

December 12, 2023 -- 2024 could be the strongest year for new apartment construction in decades, paving the way for a strong renters market nationwide, according to a report issued by Apartment List on Tuesday.

The construction boom -- which is taking place in Santa Monica -- comes on the heels of a cool-down in rental prices last year after they "rocketed up in 2021 and early 2022," the report said.

The new multifamily housing will give renters "more options and better opportunities to negotiate price and lease term," the popular listing website predicts.

"The number of new multifamily apartment units under construction hit one million for the first time ever in 2023, and completions are expected to peak in 2024," the report said.

"With so many units in the construction pipeline, 2024 should be the strongest year for new multifamily supply since the 1980s."

According to the City of Santa Monica's planning website, there are currently 813 housing units under construction, while 12 projects totaling 2,715 housing units are pending entitlement.

The Apartment List report, however, predicts that "the supply surge won’t be indefinite."

"Developers are already responding to the higher interest rate environment that we’re in now; new building permits have been falling for over a year and construction starts are following suit.

"But because of the lengthy development cycle of multifamily projects, this slowdown won’t be reflected in apartment completions until 2025.

"In 2024, multifamily operators should brace for swelling competition from new inventory, and renters should expect to find more options when searching for their next home."

While demand is expected to "bounce back slightly," researchers report that "affordability continues to be a major concern and sentiment data shows that Americans still lack confidence in the economy."

The report also predicts that "record-high" home prices and "spiking mortgage rates" will create more long-term renters.

"Even those who can afford to buy in today’s market may find that renting now actually makes more financial sense," researchers wrote.

In Santa Monica, multi-family housing development is robust, according to City and developer data.

In March, Tishman Speyer launched the initial phase of its "Santa Monica Collection" development, which in total will add 677 housing units at eight Downtown sites ("Construction of Nearly 700 Housing Units Kicks Off," March 2, 2023).

The fully entitled sites on 3.1 acres were bought by the New York-based real estate investor two years ago from WSC, Santa Monica's biggest residential developer, for a reported $150 million.

This year, Cypress Eqity put the finishing touches on two projects totaling 93 units on Wilshire Boulevard and has three other projects on Wilshire totaling 360 units pending approval.