Demand, Supply Still Sky High in Miami
The city's multifamily market displays solid fundamentals and a diverse economic profile, although it remains challenged by a substantial amount of new supply.
Miami’s multifamily market is heading into a healthy 2018. It displays solid fundamentals and a diverse economic profile, although it remains challenged by a substantial amount of new supply. While rent growth started decelerating in mid-2016, population and job gains have been cushioning the drop, producing healthy demand and ensuring that new units are slowly but steadily absorbed. The metro’s average rent climbed to $1,593 as of January, up 1.8 percent in 12 months.
Miami added 44,300 jobs year over year through November 2017, as education and health services (10,700) and trade, transportation and utilities (9,200) spearheaded growth. Tourism remained as solid as ever, with the number of overnight visitors reaching a record 15.9 million in the 12 months ending in August 2017, the Greater Miami Convention and Visitors Bureau reports. The Brightline Express rail line, which is set to connect Miami and Orlando, is also nearing completion. A portion of the project was launched in January, and the rail line is already attracting developers near its mixed-use train stations.
Roughly 10,900 units were delivered last year, and 2018 promises another 13,000 units by year-end. Due to the spate of new deliveries, occupancy in stabilized properties dropped 90 basis points in 2017, to 95.0 percent. With population growth set to continue, we expect rents to rise 2.3 percent in 2018.