MARKET SNAPSHOT

Florida Panhandle 3Q 2024

AVERAGE RENT

$1,612 3Q 2024

OCCUPANCY RATE

92.2% 3Q 2024

QUARTERLY NET DEMAND

798 [YTD: 2,644]

YoY RENT CHANGE

0.6% 3Q 2024

YoY OCCUPANCY CHANGE

-10 BASIS POINTS

QUARTERLY COMPLETIONS

1,179 [YTD: 3,305]

KEY TAKEAWAYS

The Florida Panhandle multifamily market is regaining momentum, with net absorption maintaining a positive trajectory that began in the spring leasing season. Year-to-date net absorption has reached 2,644 units, already surpassing the total for all of 2023.

As of October, a total of 4,180 units are under construction throughout the region—a notable decrease from last year’s peak of over 6,400 units.

As the construction pipeline continues to contract, annual rental growth across the region is expected to gain traction, potentially surpassing 2.5% by 2025.

SUPPLY & DEMAND
  • QUARTERLY NET DEMAND

    798 UNITS
    [YTD: 2,644]

The Florida Panhandle multifamily market is regaining momentum, with net absorption maintaining a positive trajectory that began in the spring leasing season. Year-to-date net absorption has reached 2,644 units, already surpassing the total for all of 2023. In fact, net absorption over the first three quarters of this year nearly eclipses the full-year totals of the past five years, highlighting the strength of the Panhandle’s multifamily market. However, a continued wave of new deliveries in the third quarter has outpaced this brisk absorption rate. Demand remains evenly distributed across the Panhandle’s key regions, with renters absorbing 294 units in Pensacola, 236 units in Ft. Walton, and 268 units in Panama City. Sustaining this strong demand in the coming months will be critical to counterbalancing the historic influx of new units.

  • QUARTERLY COMPLETIONS

    1,179 UNITS
    [YTD: 3,305]

Developers remain active across the Florida Panhandle, but the pace of new development appears to be moderating. As of October, a total of 4,180 units are under construction throughout the region—a notable decrease from last year’s peak of over 6,400 units. The Ft. Walton Beach area leads the activity, with 1,950 units under construction, accounting for approximately 47% of the region’s development pipeline. Pensacola follows with 1,300 units, while Panama City has 930 units underway. However, with new multifamily starts in sharp decline this year, new unit deliveries across the Panhandle are expected to slow by late 2025, indicating a potential shift in supply dynamics moving forward.

Annual Demand vs Completions

Occupancy & Rent Trends

OCCUPANCY TRENDS

The gap between supply and demand in the Panhandle multifamily market is steadily narrowing. Although net demand did not exceed supply in Ft. Walton Beach and Pensacola this quarter, Panama City saw net absorption slightly surpass new completions by approximately 30 units. Despite this overall rise in demand, the average occupancy rate for the region declined by 10 basis points year-over-year, primarily due to the influx of new units in 2023. However, a resurgence in rental demand during the third quarter of 2024 led to a 20-basis point increase in occupancy rates quarter-over-quarter, signaling a positive trend for the market. Occupancy is expected to stabilize within its current range over the next four quarters.

RENT TRENDS

Year-over-year rent growth in the Panhandle remained positive in the third quarter, albeit with a modest increase of 0.6%. This gradual upward trend is encouraging, especially as annual rent growth last quarter stood at just 0.3%. The return to positive rent growth is a welcome shift, given the supply-driven pressures that have tempered rent increases in recent quarters. However, a closer look at the key regions reveals some variation: Panama City saw an annual decrease of 0.8%, while Ft. Walton Beach posted a 0.4% increase, and Pensacola led with a 1.7% rise in rents. As the construction pipeline begins to contract, annual rent growth across these areas is expected to gain momentum, potentially surpassing 2.5% by mid-next year.

Submarket Rent & Occupancy

ECONOMY

In August 2024, the job market in the Panhandle displayed solid growth, according to recent data from the Bureau of Labor Statistics (BLS). With 5,200 new positions added, the region posted a job growth rate of 1.8%, highlighting its resilient labor market. Notably, the Education and Health Services sector led job creation with 2,800 new roles, representing an annual increase of 6.8% as demand for skilled professionals in these fields remains high. The Government sector also saw substantial gains, adding 2,200 jobs and expanding by 5.2%. Meanwhile, the Panhandle’s unemployment rate held steady at a low 3.6% in August, underscoring continued stability in the region’s workforce.

5.2K

August 2024 ANNUAL JOBS CREATED

1.8%

AUGUST 2024 EMPLOYMENT GROWTH

3.6%

AUGUST 2024 Unemployment rate
4.2% us August rate

Top 5 Employment Sector
Annual Change

Education and Health Services

Nominal Change
from August 2023
to August 2024: 2,800

Percent Change: 6.8%

Government

Nominal Change
from August 2023
to August 2024: 2,200

Percent Change: 5.2%

Trade, Transportation, and Utilities

Nominal Change
from August 2023
to August 2024: 1,700

Percent Change: 3.2%

Mining, Logging, and Construction

Nominal Change
from August 2023
to August 2024: 1,500

Percent Change: 7.2%

Other Services

Nominal Change
from August 2023
to August 2024: 500

Percent Change: 4.3%

SectorNominal Change from August 2023 to August 2024 Percent Change
Education and Health Services2,8006.8%
Government2,2005.2%
Trade, Transportation, and Utilities1,7003.2%
Mining, Logging, and Construction1,5007.2%
Other Services5004.3%
Manufacturing-100-1.4%
Professional and Business Services-200-0.4%
Information-300-11.1%
Financial Activities-700-2.8%
Leisure and Hospitality-2,100-4.7%
MAJOR ECONOMIC DEVELOPMENTS

Tyndall Air Force Modernization Project

In 2019, the U.S. Air Force initiated a comprehensive rebuild of Tyndall Air Force Base in Florida, aiming to transform it into a state-of-the-art “Installation of the Future.” The reconstruction plan, estimated at approximately $4.9 billion, encompasses the construction of 44 new military facilities and the modernization of existing infrastructure.

Pensacola Airport Expansion

The airport expansion will feature an enlarged security area, five additional gates—boosting capacity by nearly 50%—and new concession options for travelers.

FSU Health-TMH Medical Campus

The St. Joe Company, Florida State University (FSU), and Tallahassee Memorial HealthCare (TMH) have begun construction on a new health care campus in Panama City Beach, aiming to meet rising demand in the Florida Panhandle.

MARKET OUTLOOK

The outlook for the Panhandle region is exceptionally promising, driven by major economic development initiatives that are set to transform the area. Key projects, such as the $4.9 billion modernization of Tyndall Air Force Base, the $90 million expansion of Pensacola International Airport, and the construction of the FSU Health-Tallahassee Memorial HealthCare Medical Campus in Panama City Beach, are expected to boost the local economy, create jobs, and stimulate housing demand. The Pensacola airport expansion, projected to increase capacity by 50% by 2028, will make the region more accessible for tourism and business, further encouraging in-migration. The FSU Health-TMH Medical Campus, featuring an outpatient facility and a 100-bed hospital scheduled to open in 2027, will anchor new healthcare jobs and services, attracting professionals and residents alike. Additionally, the modernization of Tyndall Air Force Base will bolster the local military population, enhancing demand for nearby housing.

This wave of investment and development supports a positive outlook for the multifamily sector in the Panhandle. New job opportunities and continued population growth, coupled with high interest rates limiting homeownership, are expected to keep occupancy rates steady around 92%. Rent growth is anticipated to accelerate into 2025 as the supply-demand gap narrows, especially in areas benefiting from these large-scale infrastructure improvements and economic expansions. These projects lay a strong foundation for sustained demand, positioning the Panhandle as a thriving multifamily market for years to come.

Sources: Costar; ESRI; U.S. Census Bureau; Yardi Matrix; U.S. Bureau of Labor Statistics

Featured Florida Research Reports:

To gain further insights into the Florida Panhandle market, contact our local team:

Matt Ledom - Senior Managing Director

Matt Ledom

Senior Managing Director
Tony Sanicola

Tony Sanicola

Senior Director
Jhamil Moore - Senior Advisor

Jhamil Moore

Senior Advisor
Dennis Nevolo - Senior Advisor

Dennis Nevolo

Senior Advisor
Lance Grisham

Lance Grisham

Senior Advisor
New-Hire

Jason Puckett

Senior Advisor
Zach Croake

Zach Croake

Associate Advisor
Alex Blagojevich

Alex Blagojevich

Executive Managing Director / Co-Founder
Michael-Sullivan

Michael Sullivan

Executive Managing Director / Co-Founder

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