Look around downtown Tampa and St. Petersburg and it’s easy to believe this — Tampa Bay remains among Florida’s most active markets for apartment construction.
In a new report, the real estate firm Cushman & Wakefield says the bay area leads Orlando and Jacksonville in multi-family housing starts this year although population growth and demographic changes are fueling the demand for rentals in all three areas.
Nowhere are those changes more apparent than in Tampa Bay, which already has 600,000 more residents than Orlando and twice as many as Jacksonville.
"Tampa Bay’s population growth in the key renting demographic between the ages of 20 and 35 (is) projected to grow at three times the national average through 2020," the report says. "This growth will drive further construction in apartments in the urban and suburban markets."
Cushman & Wakefield says a "generational sandwich" is also contributing to the apartment boom in Central and North Florida. Millennials are waiting longer to buy houses while baby boomers are downsizing to rentals.
"Both ends of the spectrum are supporting growth in multi-family and will continue to be an important macro trend for the industry in the near term," the report says.
The demand for apartments is pushing up rents. Average asking prices in the first half of this year rose 3.6 percent in Tampa to $1,186 per unit; 4 percent in Jacksonville to $1,039 and 6.3 percent in Orlando to $1,280.
But the apartment boom shows signs of slowing.
Sales of multi-family complexes dropped in all three areas even as prices-per-unit hit record levels.
Higher land and construction costs have delayed the start of some projects, including Class A projects with initial rents at the top end of the market. Short-term vacancies and rent concessions increased.
Many opportunities for multi-family housing still exist, though.
"Affordable housing remains drastically under-served," the report says. Apartment developers should also look at suburban areas with top-ranked schools and pay more attention to the "Silver Tsunami" — seniors wanting walkable rental communities near affluent, single-family markets.
Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate