With rising construction costs and delayed development timeframes, existing multifamily communities have been propelled to higher rent levels and therefore higher sale values. High-growth markets, such as Florida and really the entire Southeast, have been acutely affected due to a surge in population growth and absorption of new housing significantly outpacing new deliveries.
Contracting markets are still seeing some benefits due to the overall positive conditions — low interest rates, lack of alternative investments, strong fundamentals. Newly developed communities are also in high demand from investors looking for best in class product as more and more money is flooding into the sector chasing fewer deals. Even with developers hungry to grow and cost and supply chain issues coming back in line, we don’t expect to see the multifamily market to reach an equilibrium for years to come in Florida and the Southeast.
— Darron Kattan, Managing Director
