The report covers the Miami-Dade, Fort Lauderdale and West Palm Beach metropolitan service areas.
The vacancy rate increased from 4.7% mid-year 2002 to 6.9% after the second quarter of this year, according to the report. And the vacancy rate is expected to continue climbing at least another year, to 7.7% in the middle of 2004. In the last 12 months, demand decreased because attractive mortgage rates encouraged home ownership and because of economic uncertainty. However, the rise in vacancy rates isn't expected to last, due to increased employment.
Miami, with the weakest employment in the area, had a significant vacancy hike in the last year, according to the report. The vacancy rate rose from 4.1% in mid-2002 to 6.9% a year later.
The apartment vacancy rate in West Palm Beach also increased, from 5.6% last year to 8.8% this year. In that city, unit completions were not totally absorbed by the market. In Fort Lauderdale, the vacancy rate rose from 5% to 5.8% for the same period.
Despite the increases in vacancy, the South Florida area plans to add 8,900 units in 2003 and another 6,000 units in 2004. This year, West Palm Beach will see the most new units, at 3,750. Fort Lauderdale will get 2,650 units this year and Miami will receive 2,500 units.
Next year, Miami and West Palm Beach each will see 2,500 new units, with the remaining 1,000 in Fort Lauderdale.
Although 2003 is a strong year for new construction, South Florida area land for multifamily development is limited.
The report also states sales for the first half of this year were down--although buyers looked for multifamily assets, owners were hesitant to sell; capitalization rates dropped from 8.5% in mid-year 2002 to 8% this year; the median price per unit sold in South Florida in the first half of this year increased to $57,700 from $53,500 a year earlier; and monthly asking rents in South Florida increased from $922 in mid-year 2002 to $944 a year later, although effective rents increased less, 0.3% from $882 a month to $885 a month, in the last year.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
