While many construction and renovation projects of multifamily housing in Florida were put on hold last year due to the pandemic, experts predict the market will be quick to recover in 2021. And here is why:
An increase in the population
The population in Florida is currently 21,993,000. This is expected to significantly rise this year. From those who already live in the United States moving to the sunshine state and a migration from overseas. With a large influx from Latin America, Spain, and Cuba. This means the demand for apartment properties will be in high demand and management can expect a higher rental income.
CBRE’s “2021 U.S. Real Estate Outlook” calls for multifamily returning to pre-pandemic occupancy levels in 2021 with rents fully recovering by 2022.
“The economic rebound will lead to rising multifamily demand, largely from ‘unbundling’—certain renters moving out of their parents’ homes or those of friends as job opportunities provide more financial flexibility to live independently,” stated the report. “Demand levels in 2021 likely will fall short of pre-COVID peaks in 2018 and 2019 but should rise significantly from 2020.”
Multifamily Executive goes on to explain what investors can expect:
For affordable multifamily housing, vacancy rates are expected to remain relatively low next year. More affordable housing inventory—Class B and Class C—has maintained low vacancy rates and modest rent growth this year, which is unlike previous recessions. Class C properties also had higher delinquencies, according to the report.
However, Class A assets have been impacted the most by the pandemic with higher turnover from young adults moving home, the steady delivery of new supply, and renters concerned about affordability and seeking less expensive housing. Class A assets, according to the report, may not start to recover until mid-year 2021, but Class B assets should continue to outperform with low vacancy and steady rent growth.
While many investors moved to the sidelines as the pandemic spread, investor demand for multifamily still has been more than previous recessions would have indicated. On the investment front, volume is projected to rise to $148 billion in 2021, 33% over 2020’s estimate of $111 billion but still short of 2019’s total of $191 billion.
To keep pace with today’s industry, it is important to incorporate high quality materials, unique details, entertainment elements, current trends, colors, and styles, to create a unique living environment to fit the community and draw in tenants.
Since your building is the first thing your visitors and guests see, make sure the appearance is aesthetically pleasing and is a good representation of your company. Painting adds value to your property at a minimum expense, compared to replacing materials. If you are considering a rent increase, it may be easier to justify with added curb appeal and fresh, clean interior, it will be so nice your tenants won’t want to leave.
At SWET Construction Group we work closely with you during every phase of the project, from feasibility and scope development, through engineering and construction work. Our thorough process ensures an unparalleled level of efficiency.