South Florida's multifamily market sees fewer investors than 2019

Anticipated population growth has multifamily investors spending more on apartment buildings despite sales volume dropping by 50% for the first half of 2020, compared to the year-ago period, in Miami-Dade and Broward, according to a multifamily sales report.

Price per square foot for multifamily units slumped by 29% in Broward year-over-year, but Miami-Dade saw a 25% increase in price per square foot, according to the Cushman & Wakefield South Florida 2020 midyear forecast. The report compared sales data for the first and second quarters of 2019 to 2020.

Seventy percent of sales in 2020 were for apartment buildings built after 1980. Population growth in South Florida has investors buying product that's ready to rent, said Cushman & Wakefield Executive Managing Director Calum Weaver.

Miami
Miami, Florida.

"If you have an increase in population and average home prices also continue to increase, the fundamentals are strong [for multifamily]," Weaver said.

The price per square foot rose year-over-year by $50 per square foot in Miami-Dade, from $200 to $250 per square foot. Multifamily units sold at about $180 per square foot in early 2017.

The price per square foot dipped in Broward by $70 per square foot, from $240 to $170 per square foot. Multifamily units sold at about $240 per square foot in early 2017.

"The multifamily pricing overall has held up better than expected. With the fundamentals being the way they are, low interest rates are contributing to the stability of the product right now," Weaver said.

The population is expected to grow by 0.7% in Miami-Dade, from 2,716,940 in 2019 to 2,736,744 in 2020, and by 0.9% in Broward, from 1,952,778 in 2019 to 1,970,874 in 2020, according to the report.

By late 2021, the population in Miami-Dade is anticipated to gain 0.6% new residents — reaching 2,754,183 — and Broward is anticipated to grow by 0.8%, bringing its total population to 1,986,839 people.

Sale prices for houses and condos continue to increase during the pandemic, according to the Miami Association of Realtors monthly sales reports.

Multifamily investors from New York and California are showing the most interest, Weaver said.

"There's been significant increase in people from that region looking to move from that area and invest," Weaver said. Whereas his company received about 150 online views per multifamily building in 2019, Weaver is seeing about 300 views in the third quarter.

"The more people feel more comfortable to hop on a plane and travel, we'll likely see more sales."

Investors, Weaver said, are thinking beyond business when it comes to South Florida. Many are thinking about calling it 'home.'

Tribune Content Agency
Multifamily Real estate Housing markets Home prices Florida
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