Commercial Real Estate, Capital, Insurance, Leasing & Management

Q1-22 Multifamily Report: South Florida

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As South Florida continues to attract new residents and companies from around the world, demand from renters and investors follows.
South Florida Multifamily Investment

Multifamily price per unit values continued their growth patterns much like the rest of the metrics tracking the South Florida hub. Miami-Dade County sales price per unit averaged $412,612 for Class A properties, $327,394 for Class B properties and $207,592 for Class C properties. In Broward County, the price per unit averaged $419,137 for Class A properties, $313,599 for Class B and $205,736 for Class C. Palm Beach County prices were not far behind, averaging $413,253 per unit for Class A, $320,410 for Class B and $206,812 for Class C.

South Florida Multifamily Development

The South Florida market saw fewer deliveries in Q1-22 than it did in 2021. Palm Beach County added 171 units, while Miami-Dade added 497 units and Broward County added 719 units. Despite the anticipation of an interest rate hike from the Fed, supply chain related material issues and a nationwide labor shortage, the South Florida multifamily is still seeing plenty of new construction. Although not quite matching Q4-21’s levels, construction starts were still above historical averages. The market saw 976 units started in Palm Beach, 869 units started in Miami-Dade, and 1,402 units started in Broward.

South Florida Multifamily Rent Growth

South Florida is experiencing some of the most intense population migrations in the country. As Covid-19 precautions have persisted in the Northeast and a large portion of workers remain remote, many individuals are finding themselves making a move South. Despite the anticipation of an interest rate hike from the Fed, supply chain related material issues and a nationwide labor shortage, the South Florida multifamily is still seeing plenty of new construction. Although not quite matching Q4-21’s levels, construction starts were still above historical averages. The market saw 976 units started in Palm Beach, 869 units started in Miami-Dade, and 1,402 units started in Broward.

South Florida Multifamily Market Outlook

Going forward, we expect the multifamily market to remain in high demand as the area continues to attract people and companies with its pro-business climate, no state income tax, beautiful weather and numerous attractions. However, there are some potential challenges investors should be aware of going forward. Rising interest rates are likely to cause hesitation among lenders and buyers alike. It is hard to predict exactly what the Fed will do and how many times they will increase rates this year. Inflation and the rising costs of construction materials are also worth paying attention to. This uncertainty may lead to a slowdown in transaction volume through the remainder of the year, but there’s no doubt Central Florida multifamily will remain a strong investment in 2022. Current conditions are also likely to create opportunity, as sellers take advantage of the market and liquidate their assets.

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