Multifamily Developers Pull Back on Deliveries in South Florida
According to Berkadia’s recently released Q2 2019 South Florida Multifamily Report, construction was completed on 8,522 units in the second quarter in South Florida, down from 12,562 additions posted in the second quarter of 2018.
MIAMI—While apartment demand remains strong in South Florida, multifamily deliveries were down sharply in the second quarter, according to commercial real estate firm Berkadia.
According to Berkadia’s recently released Q2 2019 South Florida Multifamily Report, construction was completed on 8,522 units in the second quarter in South Florida, down from 12,562 additions posted in the second quarter of 2018.
In the past year, development was focused in Downtown Miami/South Beach and Fort Lauderdale, which posted a combined 2,612 units added.
“While builders slowed inventory growth, healthy apartment demand persisted metro-wide due in part to the rising cost of homeownership, high population growth and continued employment gains,” Berkadia states in the report. “Pent-up demand for housing in these areas led to leasing activity highest in the Downtown/Miami Beach and the Fort Lauderdale submarkets.”
Berkadia states that in the three-county market, annual absorption surpassed inventory growth and therefore pushed occupancy higher by 30 basis points year-over-year to 96.1% at the end of the second quarter of this year.
The effective average rent regionwide rose 2.2% from $1,616 to $1,651 per month in June 2019. In Downtown Miami/South Beach the average rent for the second quarter of 2019 was $2,112 per-month. The average rent at the end of the second quarter of this year in Fort Lauderdale was $1,793 per-month.
The region’s unemployment rate fell 30 basis points from the second quarter of last year to 3.4%, which was 40 basis points below the national average.
“Steady in-migration and overall population growth in the tri-county metropolitan area created a steady stream of available workers needed by employers as unemployment tightened,” Berkadia states in the report. “With an increasing pool of applicants, South Florida employers accelerated job growth in the last year.”
After increasing 1.5% in 2018, total non-farm employment in South Florida grew 2.3% through April 2019, propelled in part by the addition of 19,400 jobs in the professional and business services sectors.