The multifamily market in Florida continues to shine bright, driven by an influx of new residents migrating to the state throughout the COVID-19 pandemic. Tampa has been one of the markets in the Sunshine State that has benefited from this in-migration trend as well as strong economic growth.
“Tampa’s apartment market has been really hot in recent months,” says Carl Whitaker, director of research and analysis at RealPage. “In fact, you could probably say that, at least relative to the nation overall, it has been one of the nation’s hottest markets since the onset of the pandemic.”
According to Whitaker, Tampa’s economy firmed up much sooner than a lot of other major markets, generating additional household formation. In addition, a higher-than-typical share of retirees are in the market, providing a decently sized renter base that tends to be less prone to recessions.
Rent growth also has skyrocketed in Tampa, with an average rental rate of $1,715 in February. Although that is up 28% year over year, RealPage data for new resident leases in 2021 shows the average renter income has grown more than 30% during the year. “So income growth and rent growth are more or less marching in tandem,” he notes.
Occupancy as of February also is extremely tight at 97.9%. According to Whitaker, this means there are only 5,600 or so available market-rate apartments in the entire metro area that counts over 3 million residents.
In addition, he says the market’s performance over the past 18 to 24 months has led to increased investor interest. Data from RealPage partner Real Capital Analytics shows approximately $6 billion worth of multifamily assets traded hands last year—twice the amount of properties in 2020 and 60% more than the previous annual high in 2019.
“Going forward, Tampa has the makings of a market that could very well remain among the nation’s hottest,” adds Whitaker. “That’s true from both a renter and an investor perspective. While construction levels have been robust—with some 8,500 units currently underway in Tampa at the start of 2022—demand has been more than able to match the pace of new construction. Even if demand eases from its current record pace today, there are many reasons to think that Tampa performance continues to pace well ahead of the U.S. overall.”