According to NAHB forecast, the multifamily real estate market is heating up in the Sunshine State. Find out how to take advantage of it in 2022.
Economists at the International Builders’ Show in Orlando, FL, covered real estate challenges and a growing multifamily market. Last year, the multifamily sector boomed, and there’s a continuation of that growth.
The Rise of Multifamily Properties
According to Multifamily Housing, due to low vacancies and rising rent, multifamily properties will rise 6.3 percent. Housing production expects to increase 2.5 percent in 2022 with an annual pace of 1.63 million.
The continuing constraints on material production and labor shortages limit the rate of building. This puts pressure on home and rental prices for single-family and multifamily builders and developers alike.
To keep up with industry growth, there’s a need for 61,000 new construction hires says Danushka Nanayakkara-Skillington, assistant vice president for forecasting and analysis, NAHB.
The other problem is that the labor force is aging and young people are not attracted to the trades industry. The increased cost of materials makes construction an even more significant challenge; costs jumped up 21 percent from last year and continue to do so.
The Multifamily Market Forecast
The Real Deal reports multifamily sales in South Florida hit a record of $11.4 billion in 2021, the hottest trend ever seen. As a result, more and more out-of-state investors are crawling towards South Florida at an astronomical rate.
Population migration will continue to grow. The popularity of the properties will continue to skyrocket and increase rent prices along with it. This influx of people will harm rent prices and people’s ability to afford the properties.
So, how long can we expect the Florida multifamily market to stay hot? With driving demand, a national housing shortage, the cost of living, and challenges with developers, we’re not sure how long this will last.
Roughly 1,000 people move to Florida every day, increasing the pricing for the multifamily market. In addition, it makes it challenging for Gen Z and Millennials to get their hands on homeownership.
In conclusion, if you want to invest in the multifamily Florida market, the best time to get in is right now. Consumer demand is at an all-time high. There will be significant activity with multifamily market growth in the next decade.