For the last 50 years, U.S. cities have undergone dramatic transformations in response to economic cycles, population growth, and shifts in consumer demand. A recent StorageCafe study did a comprehensive review of real estate activity from 1980 to 2023, spanning residential, commercial, industrial, and self storage sectors.
While construction activity has surged nationwide, certain sectors and regions have outpaced others. Notably, the self storage market saw the most substantial growth, expanding by 91%. Geographically, the most rapid development has taken place in Southern and Southwestern cities, which are leading the nation’s real estate boom.
Over 60 million homes and apartments permitted in the U.S. since 1980
Over the past 50 years, the U.S. has seen over 41 million single family units and almost 19 million multifamily units permitted. Single family home construction, the backbone of suburban America, peaked in the 2000s, when an average of 1.19 million building permits were issued each year. However, the Great Recession that followed sent shockwaves through the housing market, slashing construction activity by nearly half in the 2010s. Although there has been a recent rebound, with almost one million single family permits issued on average per year in the current decade, the scars of the financial crisis are still evident in today’s housing shortage, which experts estimate at around 3.2 million units nationwide.
Multifamily construction, on the other hand, is booming. With urban living increasingly popular and homeownership out of reach for many, the 2020s have seen a surge in apartment development. An average of 603,000 permits are being issued annually for multifamily units in the 2020s so far—a 56% increase over the previous decade. Cities like New York, Los Angeles, and Houston are leading the charge, creating more vertical living spaces to accommodate growing populations.
Self storage and industrial construction are picking up speed
Among the commercial real estate sectors, self storage saw the largest expansion. Between 1980 and 2023, the national inventory increased by 91%, to a total of 2.1 billion square feet, as Americans began accumulating more possessions and needing space to store them. The current decade shapes up to be the most productive one so far, with over 64M square feet of new space delivered annually, almost doubling the previous decade’s output.
The industrial sector is also experiencing a resurgence, with an average of 516 million square feet of new industrial space added annually in the 2020s—a remarkable 50% increase over the previous decade. Overall, over 29M square feet of industrial space were delivered nationwide between 1980 and 2023.
Office space construction reached its peak in the 1980s, with an annual average of 268 million square feet of new office space delivered across the U.S. However, subsequent decades saw a significant decline, exacerbated by the Great Recession which seriously impacted new deliveries in the 2010s. While the office market continues to face challenges related to remote work and changing workforce dynamics, office construction remains active, albeit at a slower pace.
On the other hand, retail construction, which thrived in the 1990s and early 2000s, has seen a substantial decline in the current decade. The rise of e-commerce, market saturation, and changing consumer preferences have reduced demand for physical retail space, leading to new retail development slowdown. The annual average deliveries dropped from a peak of 246 million square feet annually in the 2000s to about 57 million yearly during the current decade.
Southern cities dominate real estate growth
Since 1980, Southern and Southwestern cities have outpaced their Northern counterparts in nearly every category of real estate development. This region, known for its lower costs of living, favorable tax environments, and booming job markets, has become the country’s engine of real estate growth.
At the forefront is Houston, Texas, which has been the best-performing city for real estate development over the past 44 years. Houston’s rise is no accident. The city’s diversified economy—driven by the energy, healthcare, and technology sectors—has spurred massive residential and commercial real estate construction. Houston issued over 166,000 single family home permits and 272,000 multifamily permits between 1980 and 2023. But it’s not just housing: the city has added 292 million square feet of industrial space, solidifying its logistics and distribution hub role. Moreover, Houston’s self storage sector expanded by an impressive 26.6 million square feet during the same period.
Phoenix, Arizona, ranks second in real estate growth and mirrors Houston’s success. Known for its affordable housing and job opportunities, Phoenix has attracted a steady stream of new residents. Since 1980, the city has issued over 215,000 single family permits—the highest in the nation—along with nearly 188,000 multifamily permits. The city’s industrial and commercial real estate markets are also booming due to its status as a hub for logistics, tech, and manufacturing. Phoenix delivered an impressive 292 million square feet of space between 1980 and 2023 and over 71 million square feet of office space. The self storage sector is thriving in Phoenix, with 11 million square feet delivered overall, and the current decade seeing an average of 600,000 square feet per year, more than all the previous four decades analyzed.
San Antonio, Texas, follows closely behind, rounding out the top three. The city issued over 158,000 single family home permits and 145,000 multifamily permits over the past 4e years. Much like its fellow Texan cities, San Antonio is seeing growth across all sectors, with significant expansion in self storage, retail, and office space. The city’s vibrant culture and military presence have helped fuel this growth, making it a prime destination for real estate investors.
While the Southern cities lead in overall growth, other cities like New York City, NY and Indianapolis, Indiana, are also making their mark. NYC remains the leader in multifamily construction, issuing nearly 680,000 apartment permits between 1980 and 2023. This number highlights the city’s ongoing demand for housing despite its land constraints. New York is also a leader in office space development, with over 255 million square feet delivered in the same period, while the self storage sector saw the addition of over 22 million square feet of new space.
Meanwhile, Indianapolis, Indiana, has emerged as a real estate leader in the Midwest, benefiting from its central location and strong economic base. Known as the “Crossroads of America” for its logistics and transportation hubs, Indianapolis has seen substantial residential and industrial real estate growth. The city issued 84,000 single family home permits and 65,000 multifamily permits between 1980 and 2023. Recently, both sectors have seen a significant uptick, with the current decade seeing more permits issued annually compared to the 2010s. Indianapolis has also experienced a surge in industrial construction, delivering nearly 88 million square feet of industrial space during the same period, ranking it 6th nationwide in this sector.
As the 2020s continue to unfold, the real estate market is navigating a mix of challenges and opportunities. Developers are feeling the strain from high interest rates, labor shortages, and the cost of materials, but the demand for affordable housing and industrial space continues to stay strong, driving growth in critical areas.