$1,730 4Q 2023
$1,793 4Q 2024
3.6%
93.4% 4Q 2023
93.1% 4Q 2024
-30 POINTS
1.53M 2023
1.55M 2024
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.
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.
FORECASTED ABSORPTION
FORECASTED NEW SUPPLY
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.
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.
Average Monthly Mortgage Payment
Average Monthly Rent
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 | Q4 2023 Stabilized Occupancy | Q4 2024 Stabilized Occupancy (f) | Annual Occupancy Change (2024/2023) | Q4 2023 Average Monthly Rent | Q4 2024 Average Monthly Rent (f) | Annual Rent Change (2024/2023) |
|---|---|---|---|---|---|---|
| East Tampa | 94.9% | 94.6% | -0.3% | $1,477 | $1,541 | 4.4% |
| West Tampa | 93.5% | 93.3% | -0.2% | $1,735 | $1,804 | 4.0% |
| Northwest Tampa | 93.8% | 93.6% | -0.2% | $1,640 | $1,702 | 3.8% |
| North Pinellas | 94.2% | 93.9% | -0.2% | $1,636 | $1,699 | 3.8% |
| Downtown Tampa | 94.2% | 94.0% | -0.1% | $2,377 | $2,467 | 3.8% |
| South Tampa | 93.4% | 93.1% | -0.3% | $1,949 | $2,023 | 3.8% |
| South Pinellas | 93.3% | 93.0% | -0.3% | $1,608 | $1,667 | 3.7% |
| Central Pinellas | 93.7% | 93.5% | -0.3% | $1,721 | $1,783 | 3.6% |
| North Tampa | 92.1% | 91.8% | -0.4% | $1,494 | $1,548 | 3.6% |
| Southeast Tampa | 92.7% | 92.4% | -0.3% | $1,723 | $1,781 | 3.4% |
| Pasco County | 93.9% | 93.6% | -0.3% | $1,646 | $1,700 | 3.3% |
| Downtown St Petersburg | 94.7% | 94.5% | -0.2% | $2,237 | $2,302 | 2.9% |
| Hernando County | 91.9% | 91.6% | -0.3% | $1,544 | $1,587 | 2.8% |
| Market | 93.4% | 93.1% | -0.3% | $1,730 | $1,793 | 3.6% |
4Q 2023 Unit Inventory
Number of Units Under Construction
Number of Units UC Delivering
In the Next 4 Quarters
| Submarket | Unit Inventory: 4Q 2023 | Units Under Construction | % of Existing Inventory UC | % of Total UC | Units UC Delivering In the Next 4 Quarters |
|---|---|---|---|---|---|
| Pasco County | 20,336 | 4,574 | 22.5% | 27.1% | 1,756 |
| Southeast Tampa | 27,561 | 2,712 | 9.8% | 16.1% | 1,242 |
| Downtown Tampa | 12,798 | 3,251 | 25.4% | 19.3% | 1,020 |
| Downtown St Petersburg | 9,898 | 1,332 | 13.5% | 7.9% | 918 |
| South Pinellas | 14,106 | 822 | 5.8% | 4.9% | 818 |
| North Tampa | 33,911 | 1,027 | 3.0% | 6.1% | 617 |
| Central Pinellas | 32,180 | 1,097 | 3.4% | 6.5% | 575 |
| Hernando County | 2,126 | 548 | 25.8% | 3.3% | 547 |
| South Tampa | 12,878 | 1,170 | 9.1% | 6.9% | 347 |
| West Tampa | 22,327 | 328 | 1.5% | 1.9% | 323 |
| East Tampa | 1,081 | 0 | 0.0% | 0.0% | 0 |
| North Pinellas | 13,023 | 0 | 0.0% | 0.0% | 0 |
| Northwest Tampa | 17,287 | 0 | 0.0% | 0.0% | 0 |
| Market | 219,512 | 16,861 | 7.7% | 100.0% | 8,163 |
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.
*Most Active Buyers and Sellers are based on the sale volume of apartment units.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
P=Preliminary
| Sector | Employment Change 2023 to 2024 | Percent Change |
|---|---|---|
| Overall Employment | 17,600 | 1.1% |
| Manufacturing | 1,000 | 1.3% |
| Construction | 500 | 0.4% |
| Trade, Transport., & Utilities | 4,100 | 1.4% |
| Information | (100) | -0.7% |
| Financial Activities | (400) | -0.3% |
| Professional & Business Services | 3,600 | 1.2% |
| Education & Health Services | 8,100 | 3.3% |
| Government | 1,600 | 1.0% |
| Leisure & Hospitality | (500) | -0.2% |
| Natural Resources & Mining | 100 | 33.3% |
| Other Services | (300) | -0.6% |
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.
