$1,466 2Q 2024
-3.0%
90.7% 2Q 2024
120 BASIS POINTS
2,298 [YTD: 3,563]
1,962 [YTD: 4,811]
In the second quarter of 2024, heightened rental activity in Jacksonville led to robust net absorption, with renters absorbing 2,298 units, outstripping new unit deliveries over the same period.
The recent slowdown in construction starts is expected to aid a gradual recovery in rental rates, setting the stage for potentially accelerated rental growth of between 2% and 3% in 2025.
The Southside submarket is currently leading in multifamily development, with over 1,400 units under construction, closely followed by the Saint Augustine submarket, which has over 1,300 units in development.
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
In the second quarter of 2024, Jacksonville’s apartment market showed signs of rebounding demand with a net absorption of 2,298 units, significantly outpacing the number of units completed during the same period. This marks a substantial improvement from the previous year. Over the last year, the Southside submarkets have consistently been the primary areas driving demand in Jacksonville. Particularly in the second quarter, the Southside submarket led with a net absorption of 856 units, considerably higher than other areas like Saint Augustine, West Side, Arlington, and North Side, each of which contributed at least 20% to the market’s overall demand.
Jacksonville is undergoing a significant supply surge, with 4,811 units completed in the first half of 2024 and an additional 2,479 projected by year’s end. However, construction starts have begun to decline, signaling a return to typical levels by late 2025. The Southside submarket is currently leading in multifamily development, with over 1,400 units under construction, closely followed by the Saint Augustine submarket, which has over 1,300 units in development.
Jacksonville’s apartment market has felt the impact of a significant surge in new supply, leading to a decline in the average occupancy rate, which fell to 90.7%—a notable year-over-year decrease of 120 basis points. Despite this, the market showed signs of resilience with a 10-point improvement quarter-over-quarter. Occupancy performance varied notably across submarkets: Central Jacksonville faced challenges, recording an occupancy rate of just 86.4%, while areas like Baker and Nassau counties demonstrated stronger performance, maintaining occupancy levels above 95%. Despite the overall pressures on the market, certain submarkets, particularly those considered more affluent, have managed to retain high occupancy rates, underscoring their stability and appeal.
Jacksonville’s multifamily market is in a period of adjustment, grappling with the impact of 8,299 new units introduced over the past year. This surge has created a competitive environment, leading to a 3.0% year-over-year decline in average effective rents, now at $1,451. Despite this overall downturn, higher-end submarkets like the Beaches and Nassau County—where rents average above $1,700—have shown resilience, achieving rent increases of 1.7%. Conversely, more affordable submarkets such as Central Jacksonville have seen faster rent growth due to their lower base rents, providing landlords with greater opportunities to increase rents.
Looking ahead, the recent slowdown in construction starts is expected to aid a gradual recovery in rental rates, setting the stage for potentially accelerated rental growth of between 2% and 3% in 2025. Despite current challenges, Jacksonville’s robust economic fundamentals and continued population growth solidify its position for long-term market success.
Average Monthly Mortgage Payment
Average Monthly Rent
Jacksonville’s multifamily market experienced an uptick in investment activity during the first half of 2024, compared to the previous year. While the number of transactions held steady at eight for both periods, the total investment volume surged to approximately $332 million in early 2024. This increase was primarily driven by a few high-profile Class A transactions. Notably, one of these was the sale of Aria Durbin Creek, a Class A property constructed in 2022, which fetched $83.7 million in May. This significant deal was secured by an institutional investor, highlighting the continued interest from large-scale investors in Jacksonville’s robust multifamily sector.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
|
Under 35 Years
|
35 to 44 Years
|
45 to 54 Years
|
55 to 64 Years
|
65 to 74 Years
|
75 to 84 Years
|
85 Years & over
|
|---|---|---|---|---|---|---|
|
0.8%
|
0.0%
|
-1.2%
|
-0.1%
|
0.6%
|
-0.2%
|
0.1%
|
The under-35 age group has become the fastest-growing segment of the rental market, expanding by 0.8% from 2019 to 2022. This trend underscores a growing demand for rental housing that caters to the preferences and lifestyles of younger individuals. Properties in proximity to employment hubs and lifestyle amenities, such as entertainment venues, parks, and recreational facilities, are particularly attractive to this demographic, reflecting their desire for convenience and vibrant, urban living.
Jacksonville’s multifamily market is undergoing a period of rapid transformation. The metro’s robust population growth, driven by a favorable business climate and affordable cost of living, has spurred significant investment in residential development. While this influx of new supply has temporarily pressured rental rates and occupancy, the long-term outlook remains promising. Jacksonville’s strategic location, coupled with major economic development initiatives such as the UF Health Durbin Park campus and the port expansion, is poised to further strengthen the city’s position as a desirable destination for both businesses and residents. As these projects create jobs and stimulate economic growth, the demand for housing is expected to increase, ultimately absorbing the current oversupply and driving rental rate growth. In conclusion, Jacksonville’s multifamily market is navigating a short-term adjustment period due to overbuilding. However, the city’s strong fundamentals and promising economic outlook position it for long-term success.
