1 / 16 Next Page
Information
Show Menu
1 / 16 Next Page
Page Background

MULTIFAMILY MARKET UPDATE

RECORD-BREAKING $3.6 BILLION MULTIFAMILY SALES

IN 2016 IN SOUTH FLORIDA.

For the second consecutive year, South Florida witnessed a record amount of

multifamily sales totaling 278 property sales with approximately $3.6 billion in

value. We are now entering the eighth year of multifamily expansion in South

Florida. Fundamentals remain strong and growth will continue albeit not at

the feverish levels witnessed in previous years.

RENTAL DEMAND

New supply is easily observed by viewing the number of cranes and

construction. New rental demand is more subtle and not readily quantified

by driving or walking a submarket. Despite all the new construction, the

demand for rentals continues to outpace supply. In the past five years South

Florida’s population increased by 333,000. During the same period, 30,093

new apartment units were built. This means one unit has been built for every

11 net new residents. Over the next five years, South Florida is expected

to see a positive net migration of 7.5% or 503,260 people. Using the same

ratio, the region would need over 45,000 new rentals to keep pace with the

population growth for the next five years. There are currently 17,652 units

under construction.

Another way to consider demand is look at household formation - the number

of new households created each year. Household formations in South Florida

are expected to increase to over 50,000 each year in the next five years.

Let’s conservatively assume 40,000 new households per year and 60% enter

homeownership and 40% as renters (consistent with current homeownership

rates) that represents 16,000 new renters per year in South Florida.

The homeownership rate in South Florida is 62.1%, near a 30-year low. In

the past five years, median single-family home prices have increased 83%,

62%, and 61% in Miami-Dade, Broward, and Palm Beach Counties respectively.

Simply stated, median home values are increasing at an even greater rate

than rents, making ownership even tougher and rental demand even stronger.

The median home value in Miami-Dade is now over $330,000, meaning a

renter who could afford a 10% down payment on a median-priced home in

Miami-Dade would have a mortgage around $2,000 — $700 more than the

average Miami-Dade rental.

RENTAL SUPPLY

In the past four years 33,400 apartment units were built in South Florida.

There are currently 17,652 units under construction. Hence, we are more

65% into the development cycle and the cloud of uncertainty from

increased supply has not adversely effected the market thus far. The

reality is the perceived unknown effects of new supply are largely known

already - which is minimal and needed based on rental demand. Due to

higher construction and land costs, new supply is almost exclusively geared

towards Class A+ product. Any short-term increase in vacancies and/or

concessions will be limited to higher end product in specific submarkets

that experience several new building completions in quick succession.

Affordable or Class B and C supply remains drastically underserved.

Q1 2017 | Recap

FOR MORE INFORMATION, CONTACT :

CALUM WEAVER

Executive Managing Director

+1 954 377 0517

direct

+1 786 443 3105

mobile

www.

cushwakesouthfl.com/

multifamily

#1

IN APARTMENT

SALES IN

SOUTH FLORIDA

The Cushman & Wakefield

MULTIFAMILY

INVESTMENT

SOUTH FLORIDA TEAM

The

MARKET LEADER

in the

Sale, Marketing & Financing

of

multifamily properties and

land development

in

SOUTH

FLORIDA

.

A trusted advisor, with over

$20 BILLION

in apartment

sales in South Florida.

SOUTH FLORIDA

cushwakesouthfl.com/multifamily

1