Tampa 2024 Market Forecast

MARKET SNAPSHOT

AVERAGE RENT

$1,730 4Q 2023

$1,793 4Q 2024

2024 RENT CHANGE

3.6%

OCCUPANCY RATE

93.4% 4Q 2023

93.1% 4Q 2024

4Q 2024 OCCUPANCY CHANGE

-30 POINTS

EMPLOYMENT*

1.53M 2023

1.55M 2024

UNEMPLOYMENT RATE**

2.8% 2023

3.7% 2024

* Please note that these employment figures have been adjusted for seasonal variations and are based on Moody’s Analytics forecast as of January 1, 2024.

** Please note that these unemployment rates are estimates that have not been adjusted for seasonal variations, and they are derived from Moody’s Analytics forecast as of January 1, 2024.

KEY TAKEAWAYS

  • Rent growth in Tampa is projected to recover after spending three quarters in negative territory in 2023, with a 3.6% increase forecasted by the fourth quarter of 2024.

  • While the gap between supply and demand is narrowing it will still favor the supply side, as such, the occupancy rate in the Tampa market is expected to decline again but will see a more moderate descent than last year.  

  • The East Tampa submarket is projected to be a standout performer, recording an annual rent increase of 4.4% by year end 2024.

  • The Education & Health Services sector, vital to Tampa’s economy, is poised for robust expansion, with a projected increase of 3.3% or 8,100 jobs.

Supply & Demand

2024 FULL YEAR FORECAST

7,503 Units

FORECASTED ABSORPTION

8,163 Units

FORECASTED NEW SUPPLY

Annual Demand vs Completions

Demand / Occupancy Outlook

The Tampa multifamily market continues to grapple with a supply-demand imbalance. In the previous year, the market experienced the delivery of roughly 7,000 units, but absorption lagged at only 4,300 units, resulting in a 100-basis point decrease in occupancy, which fell to 93.4% by the final quarter of 2023.

In 2024, the substantial ongoing construction activity, featuring around 17,000 units, is poised to further influence occupancy rates throughout the Tampa metro area. Nevertheless, a closer alignment between renter demand and unit deliveries is anticipated in the upcoming quarters. Despite this, the overall occupancy rate in the Tampa market is expected to see a modest decline, projected to drop by another 30 basis points to 93.1% by year’s end, with individual market reductions varying between 10 to 40 basis points.

New Supply Outlook

In 2024, Tampa’s multifamily market landscape will see significant developments across most of its submarkets. Nearly all of the 13 identified submarkets in Tampa are expecting new unit deliveries, with Pasco County, Southwest Tampa, and Downtown Tampa at the forefront of this expansion. These three submarkets are pivotal, accounting for approximately 50% of the total units projected to be delivered in 2024. In contrast, three submarkets — East Tampa, North Pinellas, and Northwest Tampa — stand out for not having any new construction underway, marking a divergence in the development patterns within the region.

Occupancy & Rent Trends

RENT VS OWN MONTHLY PAYMENT

$3,075

Average Monthly Mortgage Payment

$1,793

Average Monthly Rent

2024 Rent trends outlook

The Tampa rental market has experienced an influx of new units over the last two years, intensifying competition among landlords and diminishing their ability to increase rents. This influx led to a notable deceleration in rent growth, which turned negative in the last three quarters of 2023, culminating in a decline of 1.0% in the final quarter of the year.

Looking ahead to 2024, a rebalancing is anticipated between the influx of new supply and renter demand, which should help offset the challenges operators faced in the previous year. Although the first quarter of 2024 may still witness negative rent growth, expectations are that demand will rebound by the spring leasing season, surpassing last year’s levels. As the gap between supply and demand narrows, landlords are likely to regain some leverage, allowing for a gradual increase in rents. By the end of 2024, a steady rise in rents is forecasted, with an expected annual growth of 3.6% in the fourth quarter. Notably, the East Tampa submarket is projected to be a standout performer, recording an annual rent increase of 4.4%.

Submarket Rent & Occupancy

SubmarketQ4 2023 Stabilized OccupancyQ4 2024 Stabilized Occupancy (f)Annual Occupancy Change (2024/2023)Q4 2023 Average Monthly RentQ4 2024 Average Monthly Rent (f)Annual Rent Change (2024/2023)
East Tampa94.9%94.6%-0.3%$1,477$1,5414.4%
West Tampa93.5%93.3%-0.2%$1,735$1,8044.0%
Northwest Tampa93.8%93.6%-0.2%$1,640$1,7023.8%
North Pinellas94.2%93.9%-0.2%$1,636$1,6993.8%
Downtown Tampa94.2%94.0%-0.1%$2,377$2,4673.8%
South Tampa93.4%93.1%-0.3%$1,949$2,0233.8%
South Pinellas93.3%93.0%-0.3%$1,608$1,6673.7%
Central Pinellas93.7%93.5%-0.3%$1,721$1,7833.6%
North Tampa92.1%91.8%-0.4%$1,494$1,5483.6%
Southeast Tampa92.7%92.4%-0.3%$1,723$1,7813.4%
Pasco County93.9%93.6%-0.3%$1,646$1,7003.3%
Downtown St Petersburg94.7%94.5%-0.2%$2,237$2,3022.9%
Hernando County91.9%91.6%-0.3%$1,544$1,5872.8%
Market93.4%93.1%-0.3%$1,730$1,7933.6%

Submarket Construction Pipeline

219,512

4Q 2023 Unit Inventory

16,861

Number of Units Under Construction

8,163

Number of Units UC Delivering
In the Next 4 Quarters

SubmarketUnit Inventory: 4Q 2023Units Under Construction% of Existing Inventory UC% of Total UCUnits UC Delivering In the Next 4 Quarters
Pasco County20,3364,57422.5%27.1%1,756
Southeast Tampa27,5612,7129.8%16.1%1,242
Downtown Tampa12,7983,25125.4%19.3%1,020
Downtown St Petersburg9,8981,33213.5%7.9%918
South Pinellas14,1068225.8%4.9%818
North Tampa33,9111,0273.0%6.1%617
Central Pinellas32,1801,0973.4%6.5%575
Hernando County2,12654825.8%3.3%547
South Tampa12,8781,1709.1%6.9%347
West Tampa22,3273281.5%1.9%323
East Tampa1,08100.0%0.0%0
North Pinellas13,02300.0%0.0%0
Northwest Tampa17,28700.0%0.0%0
Market219,51216,8617.7%100.0%8,163

Sales Activity

Preliminary data from MSCI indicates that the sales volume for conventional multifamily assets concluded 2023 on a subdued note. Although it is common for sales to be recorded up to the final days of the year and for data services to take several weeks to consolidate these transactions, it is improbable that the expected uptick in volume will significantly alter the overall trend. In the final quarter of 2023, the Tampa multifamily market saw an additional $209 million in transactions, culminating in an annual transaction volume of $1.5 billion across 41 individual asset sales. This represented a 44% decrease in dollar volume compared to the previous year. Despite being one of the more active multifamily investment markets in 2023, this annual total marked the lowest since 2014. There was also a notable shift in the buyer profile: institutional and private equity buyers receded, and private buyers emerged as the primary drivers behind these transactions.

As we look towards 2024, the outlook for Tampa’s multifamily investment market hinges on the stabilization or potential decrease in interest rates. If these conditions are met, the ongoing factors that have propelled Tampa’s ascent as a top multifamily investment destination are likely to continue. This environment could present discerning investors with long-term opportunities, especially as more attractively priced deals become available in the market.

  1. Lurin Capital
  2. Ares Management
  3. Bell Partners
  4. TruAmerica Multifamily
  1. LIV Development
  2. Bromley Companies
  3. Crescent Communities
  4. Related Companies

*Most Active Buyers and Sellers are based on the sale volume of apartment units.

TRANSACTION VOLUME


2023 Transaction Volume

Y-O-Y Change

Individual Transaction Count

Price Per Unit

Annual PPU Price Change

* Trailing 4Q average PPU

* Preliminary Data from RCA – Individual transaction $2.5M +

P=Preliminary

Employment Forecast

Forecasted 2024 Employment Sector Growth

SectorEmployment Change 2023 to 2024 Percent Change
Overall Employment17,600 1.1%
Manufacturing1,000 1.3%
Construction500 0.4%
Trade, Transport., & Utilities4,100 1.4%
Information(100)-0.7%
Financial Activities(400)-0.3%
Professional & Business Services3,600 1.2%
Education & Health Services8,100 3.3%
Government1,600 1.0%
Leisure & Hospitality(500)-0.2%
Natural Resources & Mining100 33.3%
Other Services(300)-0.6%

Economic Outlook

The economic outlook for Tampa in 2024 is cautiously optimistic, with notable growth forecasted in key sectors that underpin the city’s diverse economic base. Manufacturing is expected to experience a growth of 1.3%, reflecting a solid addition of 1,000 jobs, indicating robust industrial activity and potential for increased production capabilities. The Education & Health Services sector, a critical component of Tampa’s economy, is set to see a significant expansion, with forecasted growth of 3.3% or 8,100 jobs. This substantial growth points to Tampa’s strengthening position as a regional hub for healthcare, suggesting a rising demand for services and an increase in skilled job opportunities. These sectors’ growth will contribute to the market’s economic vitality, supporting the broader market’s stability and attractiveness to investors and talent alike.

Sources: Costar; Yardi Matrix; BLS; MSCI; Moody’s Analytics

To Gain Further Insights Into The Tampa Market Please Reach Out To Our local Team

Matt Ledom

Senior Director

Jhamil Moore

Senior Advisor

Samuel Ervin

Associate Advisor