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Southeast Florida is Undergoing the Most Intense Multifamily Construction Activity Among Major Markets

MIAMI Commercal Economic Insights from the MIAMI REALTORS Chief Economist
MIAMI Commercal Economic Insights from the MIAMI REALTORS Chief Economist

By Gay Cororaton, MIAMI REALTOS Chief Economist

Southeast Florida is undergoing intense multifamily construction activity as the area continues to post strong job growth, sustained migration, and challenging affordability conditions in the for-sale housing market. In 2024 Q1, Miami-Dade County had the highest share of multifamily construction as a percentage of the inventory of multifamily units in buildings of 50 or more units in 90 major markets, with about 24,000 units were under construction, or 19% of inventory. In the Fort Lauderdale and Palm Beach market areas, another 18,000 units are under construction, adding 10% to the inventory in each market[1].

 

The units under construction should help ease the tight vacancy conditions . Vacancy rates in the Miami-Dade, Fort Lauderdale, and Tampa market areas were at the single-digit levels as of 2024 Q1, compared to double-digit vacancy rates in Sarasota, Orlando, Tampa, Jacksonville, and other Sunbelt and Mountain markets (e.g., Charlotte, Colorado, Austin, and Nashville, Huntsville, and Boise). The median asking rents in the Tri-County area are at over $2,000 and are higher than in other Sunbelt markets such as Atlanta, Charlotte, Huntsville, Austin, Dallas, and Phoenix where the median rents are below $2,000.

 

In March 2034, there were 13,776 multifamily listings on Rental Beast.com, up 11% from one year ago. The uptick in rental listings and asking rents indicate that rental demand is outpacing the supply of rentals on the market. Job growth, migration, and affordability conditions are factors that are driving rental demand.

 

Asking Rents in Southeast Florida Continued to Increase in March 2024

 

The median multifamily asking rents rose from the prior month in March 2024 in the counties of Miami-Dade (1.8%), Broward (1.9%), Palm Beach (4.3%), and Martin (4.8%), although the asking rent fell in St. Lucie (-2.5%), according to MIAMI REALTORS® and Rental Beast data. This month’s increase is the second consecutive month of increase in Miami-Dade, Broward, and Martin, an indication that the decline in asking rents has reached its end.

 

Single-family asking rents were stable in March from the prior month’s levels in Miami-Dade County (0.0%) and Broward County (0.1%) and rose in Palm Beach (2.6%), Martin (6.7%), and St. Lucie (1.9%). However, asking rents were still lower from one year ago except in St. Lucie. Compared to one year ago, the median single-family asking rent declined in 57% of 190 zip codes.

 

 

 

 

Single-family Rentals Continue to be In High Demand

 

Single-family homes accounted for 37% of total leased units in the first quarter of 2024 and 36% of total rental listings. In January 2019, single-family rental listings accounted for just 19% of listings.

 

While the largest shares of single-family listings to total listings are those of St. Lucie (68%), Palm Beach (53%), and Martin (45%), the sharpest increases were in Miami-Dade (from 20% to 29%) and in Broward (from 29% to 41%).

 

Job Growth, Migration, and Affordability Conditions are Driving Rental Demand

 

In February 2020, total employment (payroll and self-employed) rose at a faster pace than nationally (0.4%) in Miami-Dade (2.0%), Broward (1.6%), Palm Beach (1.2%), Martin (1.2%), and St. Lucie (0.8%).

 

Driver license exchange data shows a surge in movers from abroad. In 2024 Q1, there were 10,691 foreign driver license exchanges, a decline of 14% from one year ago but about fourfold the level in 2021 Q1 (data on foreign license exchanges is not available for prior years).[2]

 

In January 2024, the Miami International Airport and Fort Lauderdale-Hollywood Airport had 4 million domestic and international arrivals, up from3.7 million in January 2023.

 

As of February 2024, the median asking rents were lower than the principal, interest, taxes, and insurance (PITI) on a single-family home by 10% to 30%. In Miami-Dade County, that difference translates to $1,272/month. In the multifamily market, the median asking rent of $2,800 was $359 lower than the monthly PITI. The monthly PITI has outpaced the median rent since the second half of 2022 in the wake of the Federal Reserve Board’s rate hikes.

 

Download the March 2024 Southeast Florida Rental Market Report below.

[1] Cushman and Wakefield, U.S. Multifamily MarketBeat | United States | Cushman & Wakefield (cushmanwakefield.com)

[2] Driver License Exchanges in Southeast Florida Continue to Normalize in 2024 Q1 But are Still Higher than Pre-Pandemic Levels – MIAMI REALTORS®

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