Miami's apartment market is sizzling.

MIAMI—Several factors support Miami-Dade County’s place within the upper tier of multifamily markets in the country. So says the latest report from Marcus & Millichap.

M&M’s third quarter Apartment Research Market Report for Miami-Dade County reveals the number of workers in service industries has surpassed its pre-recession peak and is growing, though job creation in other employment sectors remains lackluster. The firm reports that residents employed at shops, bars, restaurants and hotels are lifting several segments of the local economy and sustaining low apartment vacancy.

“Also, housing affordability has improved throughout the South Florida region, but the homeownership rate has declined, expanding the pool of potential renters,” M&M reports. “The entire region, and Miami-Dade in particular, could also see a surge in housing demand if immigration reform is enacted.”

While prospects for a prolonged period of steady rental housing demand appear strong, M&M says new construction could create some occasional swings in vacancy as new multifamly projects are stabilized. Scheduled additions to supply this year and beyond, however, are a benign 2.2% of existing stock, minimizing the potential marketwide impact of development.

“Although expensive high-rise condos are forming on the waterfront, building rentals remains challenging due to limited land and higher costs to transport construction materials from outside of the state,” M&M reports. “Sales dollar volume topped $1 billion over the past 12 months, the first time that threshold has been breached in seven years. The most active segment of the market remains properties pricing from $1 million to $10 million.”

Click here to read the full report, which offers insights into cap rates, investors and GSEs activity.