South Florida ranks in top 5 nationally in new apartments slated for completion in 2023
By Erik Bojnansky | September 12, 2023 | South Florida Business Journal
South Florida ranks among the top five in the nation for the highest number of apartments slated for completion by 2023, a recent report stated.
By the end of this year, 20,906 apartments will have been built in Miami-Dade, Broward, and Palm Beach counties, according to an August report from RentCafe, a rental listing website.
The region is No. 4 in the nation. The sheer number of new apartments built, or projected for completion, in the Miami metro area this year was only surpassed by the metro areas of New York (33,011), Dallas (23,659), and Austin (18,409).
In contrast, just 10,212 apartments are slated to be built in the Orlando metro area by the end 2023. In the Tampa metro, 8,817 apartments are projected to be finished this year and 7,145 in Jacksonville.
The data from the report was compiled by Yardi Matrix, a business development and asset management tool that used certificate of occupancy data from local jurisdictions to calculate confirmed and likely completions in 2023. Both Yardi Matrix and RentCafe are owned by Santa Barbara, California proptech firm Yardi.
The largest segment of South Florida’s new rentals (9,362 apartments) slated for completion are in Miami, followed by Hialeah (2,055 units), and West Palm Beach (1,175 units), the report stated.
A large number of apartments were finished in South Florida between 2020 and 2022. Within that time period, 42,960 were built in this region, which was the fifth highest volume in the U.S.
Demand for apartments in South Florida has skyrocketed since the pandemic as more high-income households move to the region in order to avoid state income taxes, business regulations, and Covid-19 restrictions.
Yet, in spite of the new inventory, Miami-Dade County remains one of the most competitive places for a vacant apartment with an average of 24 renters seeking to occupy a single apartment, another RentCafe report stated. In Broward, an average of 14 potential renters compete for a single apartment. In Palm Beach County, each apartment has 11.
The addition of new apartments has made rental hikes less severe. In the recent past, year-over-year rents increased by more than 20%. As of July, South Florida’s year-over-year median rent went up just 2.96% to a median monthly rate of $2,817.31, according to the latest Waller, Weeks and Johnson Rental Index.
Ken Johnson, a professor of economics at Florida Atlantic University who helped create the index, said 21,000 units aren’t enough to catch up the demand for housing in South Florida. That will keep rents in South Florida high.
To afford the higher rents, more people will pack into each available unit.
“Most likely rents will not come down but instead flatten out – i.e. stop appreciating significantly,” Johnson said. “Thus, higher rents but with more people living per unit. This is a pretty common scenario for how metropolitan areas have dealt with rapid population expansion in the past.”
Though there are signs that South Florida’s population growth is not as fast as other parts of the state, Johnson added. According to StatsAmerica, South Florida’s population growth in the next decade is 6.8%. Within 25 miles of Orlando, Tampa, and Fort Myers, the population is expected to grow 22.5%, 15.4%, and 27.6% respectively.
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