The State of Florida’s Apartment Market: Numbers Talk
Note: This is a guest blog post by Dakota Sproule, Content Strategist, reporting on behalf of Swamp Rentals—a website that helps connect renters with apartments in Gainesville that fit their lifestyle and budget.
Numbers talk, but what are they saying? Brian Alford, Market Economist with CoStar Group, and Robert Smith, President/CEO at Smith Equities Real Estate Investment, shed some light on the state of the Florida apartment industry at the NCFAA 2018 Annual Tradeshow. By comparing major markets throughout Florida and the nation, we can forecast changes in the rental market to predict how it may affect our portfolios. By evaluating factors like job growth, homeownership rates, vacancy and sales, management companies can alter their marketing, pricing and target audience to improve their portfolio’s gains.
Every market is different and understanding how these factors affect your portfolio is key. For instance, 85% of Gainesville’s construction is student housing, and the metro is comprised of mostly young people. Job growth has improved over the last 12 months, ranking above the national average. Meanwhile, Ocala, just south of Gainesville, has one of the lowest job growth rates in the nation. Their unemployment rate is high with very little construction growth over the past 10 years. It’s extremely affordable to buy a home in Ocala, however, there aren’t a lot of single family homes available. This has affected the rent growth, resulting in a 7-8% growth over the past 2 years. Alternatively, Orlando is one of the top three fastest growing markets across the nation. Of the top 20 national rent growth markets, Orlando is number one with an equally high sales volume.
Nationally, rent growth and pricing is flat and the construction peak appears to have passed. Comparatively, Florida is outperforming the nation with major markets like Orlando, Jacksonville and Tampa ranking well-above the national average for rent growth. This data allows those in property management to better analyze trends in their market, better understand their traffic and audience, and forecast future demand.