$1,754 2Q 2024
-2.1%
93.2% 2Q 2024
-70 BASIS POINTS
2,740 [YTD: 4,204]
2,559 [YTD: 7,211]
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
Rental demand is strengthening in the Tampa multifamily market, with 2Q 2024 witnessing a net absorption of 2,740 units, surpassing new unit completions for the quarter. Over the past year, Pasco County and Southeast Tampa have emerged as pivotal areas, accounting for nearly two-thirds of the overall market demand. Notably, every submarket experienced positive demand in the last quarter.
Tampa’s apartment construction is booming. Over 13,400 units are currently under development, following the addition of 2,559 units in the past quarter. Pasco County leads in new supply, contributing nearly half of the units with 4,347 delivered in the last year and another 2,960 in progress. Significant development activity is also occurring in Downtown Tampa and Southeast Tampa, with 2,608 and 2,142 units respectively set to be delivered over the next year.
With the introduction of 2,559 new units in 2Q, bringing the annual total to 10,574, Tampa’s rental market has faced significant supply-side pressure, evidenced by a 70-basis point decrease in occupancy from the previous year. The average occupancy rate for the metro settled at 93.2% as of Q2 2024. However, as demand strengthened in the second quarter of 2024, the pace of the occupancy decline slowed, with a quarter-over-quarter reduction of just 10 basis points. This indicates that occupancy rates are beginning to stabilize, reflecting a balancing market despite the influx of new units.
In the second quarter of 2024, Tampa’s apartment rents experienced a slight decline, mirroring trends observed in other Sunbelt cities. The average monthly rent now stands at $1,754, positioning Tampa as a more affordable alternative compared to the pricier markets of South Florida and attracting newcomers to the state. However, rent changes were not uniform across the area; some neighborhoods saw modest increases (0.2%), while others faced steeper declines (up to 4.5%). East Tampa was notable as the only area with positive year-over-year rent growth. Conversely, Pasco County, where average rents are approximately $1,654, experienced the sharpest drop (4.5%), largely attributable to a surge in new supply.
Average Monthly Mortgage Payment
Average Monthly Rent
Real Capital Analytics data highlighted a moderate surge in sales activity for conventional multifamily properties in the Tampa metro. In the first half of the year, total sales volume reached $510.4 million, marking a 26.8% increase compared to the same period in 2023. Additionally, the average price per unit increased by 3.6% to $235,500. Private investors have dominated the buying landscape, comprising nearly 77% of the volume year to date, and aligning with the five-year average. However, institutional investors have recently increased their presence, holding a 31% market share over the past three years, a notable rise from their 19% average over the last decade. This shift indicates a growing confidence in Tampa’s multifamily market among larger investors.
*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 +
|
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
|
|---|---|---|---|---|---|---|
|
1.0%
|
-0.8%
|
-1.6%
|
0.5%
|
0.6%
|
0.7%
|
-0.2%
|
The under-35 age group represents the fastest-growing segment of renters in the Tampa metro area, expanding by 1.0% from 2019 to 2022. This trend underscores a growing demand for rental properties that are conveniently located near lifestyle amenities and employment hubs.
Tampa Bay’s apartment market is moving towards stabilization with 13,463 units currently underway, with Pasco County, Downtown Tampa, and Southeast Tampa accounting for over half of these new deliveries. Encouragingly, demand is strengthening—absorption rates are keeping pace with the increasing supply, evidenced by net absorption exceeding completions last quarter. Affordability remains a significant draw; Tampa’s average rent of $1,754 is considerably lower than South Florida’s, making Central Florida an attractive destination for new residents. This trend is expected to persist, with annual rent growth projected to turn positive by early 2025.
Additionally, a steady stream of residents relocating from the more expensive Northeast is adding another layer of stability to the market. This influx is expected to continue, if not increase, reinforcing Tampa’s apartment market as a robust and strategic investment opportunity.
