South Florida will see more than 14,000 new apartments enter the market this year. The listings for single-family homes, condos and townhouses also are on the rise.
Will that be enough to quench the region’s rising costs? A recent study conducted by RentCafe dove into new apartment construction, finding that a record more than 500,000 new apartments are rising this year across the United States. And South Florida ranks high for new apartment construction compared to other cities, such as New York City, Dallas and Atlanta. About 14,000 of the new apartments are being built and will open by the end of the year in the tricounty area, surpassing the average of about 11,000 units.
“From the national standpoint, new housing supply is unprecedented in the amount of completions that are going to finish this year and next year,” said Doug Ressler, the senior analyst at Yardi Matrix, the data provider behind RentCafe’s studies.
This can be primarily attributed to two factors: population influx and low interest rates about three years ago when the world was emerging from the COVID-19 pandemic, Ressler said.
“With the increasing demand and lack of housing stock to buy, people rented longer and are renting longer. And so developers took that as an initiative to be able to start building a housing stock, and where they’re looking for is in density areas, Miami being one of the gateway cities,” Ressler said. “The greater Miami area is a magnet for population. It’s one of the top metros for inbound migration and population growth.”
A byproduct of these new apartments is a deceleration in prices, Ressler said. Prices won’t necessarily decrease, but they won’t skyrocket either; instead, they will increase at a more moderate rate.
“There’s already concessions being offered by landlords to be able to attract people,” Ressler said. “The amount of supply that’s coming on board will continue through 2026, and renters should expect that oversupply will make it a much more consumer-friendly market in terms of concessions and rental rates that can be accommodated by their budget.”
Concessions aim to draw in renters with deals, such as a month of free rent. Still, many South Floridians struggle to afford rent anywhere in the region — according to researchers at Florida Atlantic University’s College of Business, the average rent in the greater Miami area, which includes Palm Beach, Broward and Miami-Dade counties, was around $2,800 in May, and households have to bring in more than $112,000 to avoid being “house poor.”
Beyond Apartments
Is a similar trend happening in the single-family, townhome and condo markets? In a way — while entirely new homes are not necessarily hitting the market as rapidly as the apartment-rental world, active listings are far higher in much of South Florida than they were this time last year.
For example, in Broward County, there were nearly 9,000 active listings of townhouses and condos in July, as opposed to about 4,500 active townhome and condo listings in July of last year, according to the Broward, Palm Beaches and St. Lucie Realtors.
“Definitely inventory has come up,” said David Serle, the Broward, Palm Beaches & St. Lucie Realtors’ president.
Has that affected prices at all?
“In the next three to four months, you might see that average sale price come down a little bit, but prices are still pretty much remaining stable even in the condo market until it gets into closer to the eight, nine months of inventory,” Serle said. “That’s when you’ll see prices start to come down a little bit.”
Months supply of inventory is how many months it would take for active listings to run out if no new listings were added to the market. In Broward County, the months’ supply of inventory for single-family homes in July was about four months and eight months for townhouses and condos. In Palm Beach County, the months’ supply of inventory was similar, with about 4.5 months of inventory for single-family homes and seven months for townhomes and condos.
For the rest of the year, Serle doesn’t anticipate any significant changes.
“Trend-wise, I think it’s going to stay continually the same. You’re going to have more of a stabilization of the market,” he said, adding: “Inventory will probably start to stay flat, it may even, restrict a little bit.”
Source: SunSentinel
