The country is building less. Modesto is building more.
U.S. apartment construction is pulling back, while Stanislaus County has its largest pipeline in 25 years. Here is what that could mean for local owners heading into 2027.
Modesto market (Stanislaus County), 2026 Q4. Source: CoStar Group, Nov. 2, 2026.
Two supply stories moving in opposite directions
Nationally, the building boom is winding down. CoStar projects U.S. completions will fall about 18% this year to roughly 434,000 units, then drop another 19% in 2027, with national vacancy easing from 7.9% to 7.5% by the end of 2027.
Stanislaus County is moving the other way, with about 660 units under construction. That is a 25-year high and 4.0% of inventory, versus 2.7% nationally. Modesto mostly sat out the last cycle: inventory grew 3.3% in five years versus 14.7% nationally, nothing delivered in the past 12 months, and vacancy fell to 5.0%.
All 660 units are in two Class A projects: The Monte Vista in Turlock (348 units, est. March 2027) and The Bridges in Salida/Riverbank (312 units, est. June 2027). CoStar expects vacancy to rise to about 5.8% in 2027, then ease to 5.3% in 2028. Meanwhile, the 10-year Treasury closed at 4.98% on October 29, up from 4.08% a year earlier.
The competition is at the top. With most of the new construction concentrated in higher-end apartments, the greatest leasing competition may be felt in that segment. Owners of existing properties should still pay attention to concessions and rental pricing as those new units enter the market.
Rates matter more for value than supply. Cap rates average about 6.1% to 6.2% with the 10-year near 5%, so leverage helps buyers less. If a sale or refinance is coming, run the numbers at today's rates.
Look past the 2027 bump. CoStar forecasts deliveries dropping to about 76 units in 2028. It is a forecast, but it points to a one-time supply wave, which matters if you are weighing selling now versus holding.
Selected Stanislaus County closings
27 closed sales totaling $79.8 million over the past 12 months.
Closed Dec. 2025 to Sep. 2026. Source: CoStar Group, Nov. 2, 2026. Deemed reliable but not guaranteed.
How does the new supply affect your property?
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Market data: CoStar Group (Nov. 2, 2026 reports; CoStar News, Oct. 29 and Nov. 1, 2026). Treasury yields: FRED, DGS10. Forecasts are estimates and may change. Property figures are from offering memorandums based on owner-reported information. Information deemed reliable but not guaranteed. Not an offer to sell; pricing and availability subject to change. Jacob Friedrich, CA DRE #02017662.
