Jacksonville’s multifamily market continues to experience strong demand, even as new construction activity slows. In the first quarter, approximately 1,800 units were absorbed, the highest quarterly absorption since early 2021, according to a market report from MMG Real Estate Advisors' Matt Ledom. This figure also marks the second-highest quarterly absorption recorded in the past decade.
Lemdom said there was big demand for higher-quality products, with 70 percent of the absorption coming from those assets. The Southside led all submarkets with 37 percent of the space getting absorbed.
The report also said occupancy has started to "stabilize," with Jacksonville's first-quarter rate being 90.7%.
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Both strong performances came as developments have slowed dramatically. Units under construction have plummeted by 50 percent year-over-year, while new starts have plunged by 40 percent over the same period.
“We’re finally seeing the pendulum swing back toward balance,” Ledom wrote in the analysis.
“After years of aggressive development, the slowdown in construction is helping the market catch its breath, just as demand remains historically strong.”
Meanwhile, rent performance and deal activity were a little softer. Rents dropped by 0.7 percent year-over-year to an average of $1,489. The fundamentals were a little stronger with mid- and lower-tier assets, with the latter increasing by 0.3 percent, as affordability was a key driver. That's an interesting trend since the absorption of units favored higher-quality properties in the first quarter.
Investment sales dropped to $530 million, a 3.1 percent decrease. However, the MMG did note that "investor sentiment is beginning to improve" due to the Federal Reserve's most recent three rate cuts and the flow of product entering the multifamily space in Florida's largest city.
Also, while rents were sluggish in the first quarter, MMG expects the cooling supply to result in the category rising by two percent annually by the end of 2025. Overall, the brokerage firm is optimistic that Jacksonville's multifamily sector will stabilize in 2025.
“The fundamentals are lining up,” Ledom said.
“This is a market with strong demographics, improving rent growth, and a development pipeline that’s finally manageable. For multifamily investors looking for stability and upside, Jacksonville remains a top-tier opportunity.”
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