The Miami metro continues to see migration from high-cost states, with both younger professionals and retirees choosing the market for lifestyle, climate, and job opportunities.
Major firms, such as Citadel Securities and Starwood Hotels, also have expanded into the metro, creating thousands of high-paying jobs. According to Doug Ressler, manager of business intelligence at Yardi Matrix, these relocations have added an estimated 8,000 new positions with average salaries over $100,000, boosting demand for upscale housing. In addition, the growth in the professional services and tech industries has increased demand for Class A and B multifamily units.
“Demand in the Miami multifamily metro market through 2025 is being driven by a combination of economic, demographic, and structural factors,” notes Ressler.
Rent growth for Miami, Fort Lauderdale, and West Palm Beach is down from the double-digit increases seen during the pandemic boom, normalizing to -0.7% and 1.5% year-over-year growth. However, the metro still faces an affordability crisis.
“Miami remains one of the most rent-burdened cities in the U.S., with average rents nearly double the national average,” says Ressler. “Lower-income renters are struggling the most, with rising vacancies in Class C properties due to job losses in hospitality and service sectors.”
While Class A and B units are seeing strong lease-up activity, the metro’s overall vacancy rate is around 6%, with 9,649 units delivered in the past 12 months and 7,654 absorbed.
“New supply is being absorbed efficiently in higher-tier segments, while affordability pressures persist in lower-income brackets,” he notes. “The slight oversupply is expected to be temporary but is putting pressure on landlords in the short term.”
Despite the demand, Ressler says developers are facing constraints. Strict zoning laws and lengthy permitting processes are slowing down new developments, especially in urban cores. In addition, skyrocketing property insurance premiums in the state continue to make it harder to underwrite new developments and maintain existing assets.
Higher interest rates and tighter lending standards also are having an impact on multifamily transaction activity and refinancing. However, while not at pandemic-era highs, activity has remained resilient, especially for well-located Class A and B assets.
“Institutional buyers are on the sidelines, with private investors dominating the market,” adds Ressler.
