In spite of these difficult times, many small markets are seeing a surge in construction of multifamily housing and medical buildings.
A recent article in Real Page, “New Apartment Supply in Several Small Markets to Rise in 2020”, reveals some of those locations for investors.
Of the seven smaller markets scheduled to see a spike in new supply in 2020, four are in Florida. As with much of Florida, these four markets have benefited from in-migration of new residents – particularly retirees – and necessitated varying levels of new construction after recent hurricanes.
The Palm Bay market, located off the eastern coast of Florida, has seen limited new supply during this economic cycle, but the 2,234 units scheduled to come online in 2020 is nearly twice the total amount of new supply received so far this cycle. This new stock will grow total inventory by 6.5% in 2020, and growth will be similar – with another 2,000 units scheduled to complete – in 2021.
Cape Coral-Fort Myers, FL will see the completion of more than 3,000 units in 2020, more than double the deliveries from 2019. This year’s deliveries represent a 50% increase in total cycle supply. This market will grow total inventory 7% in 2020, and another 5.9% in 2021. Deltona-Daytona Beach – the only Central Florida market on this list – is set to see more than 1,700 units complete this year, about 1,000 units more than in 2019. Since 2010, the market has received only 1,700 new units, so oncoming supply will grow the total cycle new supply by about 75%. This market will see total inventory grow 5.2% in 2020 and another 4% in 2021. North Port-Sarasota-Bradenton, on Florida’s west coast, is slated to receive about 3,000 units in 2020, roughly 1,000 more than delivered in 2019. This market will grow inventory 5.4% in 2020 and 4.2% in 2021.
Another hurricane-impacted market, Wilmington, NC, will see unprecedented new supply in 2020 with nearly 1,400 units scheduled to deliver. Though the North Carolina market has seen consistent new supply this cycle, it has never hit such a high annual inventory growth rate, which is anticipated at 6.2% in 2020.
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