MARKET SNAPSHOT
Jacksonville recently experienced one of the largest waves of new construction in its history, although the pace of development slowed in 2024 and is expected to decelerate further in 2025. Over the past five years, the city’s market-rate multifamily inventory has grown by more than 20%. The 4,628 units currently under construction are expected to contribute an additional 3.8% to the inventory upon completion. However, construction starts have dropped by more than 60% over the past year, and the total number of units under construction is down over 50% compared to 2023 and nearly 25% below the 10-year average of approximately 6,100 units. About half of the apartment projects currently underway are expected to be completed by mid-2025, including the largest development, the 331-unit RISE Baymeadows in Deerwood Center, scheduled for completion in May 2025. This slowdown suggests that Jacksonville’s active development cycle has likely peaked, and the construction pipeline is expected to decline substantially in the latter half 2025.
Two submarkets—Southside and North Side—comprise approximately 50% of Jacksonville’s active construction pipeline. Downtown Jacksonville also remains a focal point, accounting for 15% of the market’s under-construction inventory despite representing just 3% of the overall base inventory. Southside remains the dominant multifamily submarket in the area, with approximately 855 units under construction, set to expand its inventory by another 3%. Meanwhile, nearly 1,110 new units are underway in the North Side. Higher-tier properties continue to dominate construction activity, with around 3,700 units currently in progress.
Modest renter demand in 2023 evolved into robust demand in 2024, with 6,980 total units absorbed during the year. The second quarter of 2024 was the strongest single quarter for absorption in the past decade, with nearly 2,500 units absorbed. CoStar’s base case forecast anticipates absorption to reach 2,900 units in 2025; however, this projection may be conservative, as it represents a 60% decline from 2024 levels. The tapering development pipeline over recent quarters is expected to support a gradual increase in occupancy rates in 2025. Combined with projected population growth—expected to outpace the national average across all age groups through 2027—and a more sustainable pace of new development, these trends are likely to establish balanced supply and demand fundamentals in the coming years.
Demand has been particularly strong in the Southside and Saint Augustine areas, which together accounted for approximately 60% of total absorption over the past year. Notably, no submarkets reported negative absorption during this period. In the short term, occupancy rates are forecasted to remain stable across most submarkets, with the North Side poised to outperform and achieve increased occupancy in 2025. Lower- and mid-tier properties have been less affected by the influx of new supply in 2024 and are expected to continue maintaining higher occupancy levels than upper-tier properties moving forward.
While renter demand was relatively weak in 2023, it showed significant improvement in 2024, paving the way for a return to positive rent growth by the second half of 2025. The supply-demand gap is narrowing, and the slowdown in new construction is expected to stabilize occupancy rates. The outlook for rent growth is increasingly optimistic, with a projected recovery to a more sustainable rate of 2.0% by the end of 2025. Although the influx of new supply over the past two years has created short-term competition among newly delivered properties—limiting the ability to raise rents—occupancy rates have remained stable and are expected to improve as the construction pipeline contracts in a market with a growing population. Due to this increased competition, higher-tier units have experienced an average annual rent decline of approximately 2%. In contrast, lower- and mid-tier units have achieved modest rent increases of about 1% over the past year.
Population growth remains a significant advantage for Jacksonville, as the metro continues to rank among the fastest-growing markets in the nation. According to ESRI, the metro population is expected to grow at more than twice the national average through 2029, supporting strong long-term rent growth prospects as the construction pipeline eases. With average asking rents at $1,475 per month, Jacksonville offers a more affordable alternative to other coastal Florida markets. The region’s affordability, favorable climate, and quality of life continue to attract renter in-migration, further bolstering rent growth.
12-month period ending November 2024
The Jacksonville multifamily market is entering 2025 with improving fundamentals, driven by growing renter demand and a tapering construction pipeline. Despite a significant wave of new construction in recent years, the pace of development has slowed considerably while absorption levels remain healthy, which is expected to support higher occupancy rates and a gradual return to positive overall rent growth by mid-2025. Lower- and mid-tier properties are already seeing rent growth, and upper-tier properties are anticipated to follow as competition from new supply eases.
Jacksonville’s multifamily market is poised for stabilization and improvement in 2025. Slowing construction, stable occupancy levels, and the nation’s fastest-growing population suggest balanced supply-demand fundamentals in the years ahead. Overall, the metro continues to offer an attractive investment opportunity, supported by its affordability, strong in-migration trends, and an improving rent growth outlook.
