In the Southeast, late October brings brisk mornings and flawless afternoons. This week, we celebrate the beginning of the World Series and the end of baseball season. It’s a perfect time to reflect on apartment markets and what indicators might help us understand future sustainability.

Five years into this apartment cycle, many wonder how much longevity we have and what markets still have considerable runway ahead. It’s tough to determine the future endurance of the entire cycle as each market is at a different point. There are two fundamental indicators I track to help handicap where each particular market is in the cycle: job growth and new deliveries. Market sustainability and viability come from a competitive and diverse economy with organic job creation. The country’s hottest markets predictably consist of its highest job creators.

The influx of new apartment deliveries has many believing the market will soon be oversaturated and becoming flat. It’s a warranted theory but statistically groundless, when you analyze the current supply-and-demand thresholds. That fact is that we have 250,000 new apartment units on the ground in 2014, with demand surpassing supply of 350,000 units. Developers are experiencing record absorption for all units they complete.

What gets less attention is the fact we annually demolish 100,000 units that are functionally obsolete. These former communities are being transformed into green space, other commercial uses or new apartment communities. This equates to a net inventory of 150,000 units being less than half of the market’s current demand threshold. It’s a powerful formula for short-term sustainability.

Apartment Market Scorecard 

Red hot: Atlanta, Los Angeles, Houston, New York, Seattle, Miami, San Francisco

Heating up: Kansas City, Florida Panhandle, Tampa, Phoenix

Cooling off:  Cleveland, Denver, Chicago, Austin, San Antonio

Ice cold: Boston, Washington D.C., Detroit, Baltimore, Cincinnati, Philadelphia

Ironman, barbecue champion and deal enthusiast, Will is also the Atlanta-based leader of the Southeast Multifamily Advisory Group of Colliers International. Will brings several years’ experience in the industry, primarily focusing on multifamily investment services and capital markets.