Q4 2022 Multifamily Real Estate Report: Miami, FL
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Miami is known for its vibrant culture, beautiful beaches, Art Deco architecture, and lively nightlife.
Unemployment in the city declined steadily throughout Q4, from 2.4% in October to 2.0% in December.
In 2022, Miami’s metro population increased to 6.215 million from 2021’s 6.167 million.
In Q4 2022, Miami’s multifamily real estate market saw rents hold steady, positive absorption, and decreased vacancies.
General Area Overview & Demographics
Miami is home to a diverse population of ethnic and racial backgrounds. The breakdown is 70.4% Hispanic or Latino, 13.3% White alone (not Hispanic or Latino), 12.9% Black or African American alone, 1.6% Asian alone, and 1.8% two or more other races.
Miami, FL Median Household Income & Population
The household income in Miami varies widely, with some neighborhoods having higher average incomes than others. The median household income in Miami is around $65,000, yet most residents struggle to keep up with monthly rent payments. Residents in Miami, according to recent Census Bureau data, are also some of the most worried about inflation.
The city has a youthful population, with many residents in their 20s and 30s. However, there are also many older residents and retirees living in the area.
Home to several higher education institutions, including Florida International University, Miami Dade College, and the University of Miami, Miami provides a range of degree programs in various fields of study.
The city is a popular tourist destination with its beaches, nightlife, and cultural attractions, such as the Art Deco District, Little Havana, and the Vizcaya Museum and Gardens.
Miami has a tropical climate, with hot and humid summers and mild winters. The city experiences a rainy season from May to October, with the possibility of hurricanes from June to November.
Summary of Miami Multifamily Real Estate Performance in Q4 2022
Miami’s multifamily real estate market saw falling vacancies in Q4 2022, ending the year at around 4.6%, slightly lower than Q3’s 4.7%.
Across all submarkets, Mid-Beach recorded the highest vacancy rate at 16.7%, the only submarket to reach double-digit vacancies in the fourth quarter; the second-highest was Downtown Miami, at 6.5%.
Vacancies were the lowest in Westchester/Tamiami at 0.6%, the only submarket with vacancies below 1%. The next lowest was Hialeah/Miami Lakes, at 1.5%.
Q4 2022 continued Miami’s 2+ year trend of positive multifamily absorption, with nearly 480 units absorbed, a notable decline from Q3’s nearly 1,000 units absorbed.
What are multifamily rents like in Miami?
Miami’s multifamily real estate market held constant average rents from Q3 2022 to Q4 2022 at around $2,220 per month.
Coral Gables was the submarket with the highest average monthly rents at $2,942, with Downtown Miami coming in right after at $2,860. North Beach saw the lowest average monthly rents at $1,583 per month.
Purchase & Leasing Activity
Overall sales volume for Miami multifamily real estate in 2022 reached $4 billion, a 4% decrease from 2021’s volume.
Downtown Miami accounted for $1.5 billion of total sales volume in 2021. The Kendall and Outlying Miami-Dade Counties saw no sales volume for the year.
Average price per unit went for around $336,000. Mid-Beach edged out Downtown Miami for the highest average price per unit at $470,000.
Notable Multifamily Real Estate Deals in Miami in Q4 2022
There were several notable deals that occurred for Miami multifamily real estate in Q4 2022:
- Pantzer Properties purchased The Boulevard for $175 million.
- Lefrak purchased Core for $127 million.
- Lurra Capital purchased Blume Coral Gables for $42.5 million.
- Rental Asset Management LLC purchased Champion Lofts for $12.2 million.
These are select examples among other activity.
New Multifamily Real Estate Development Activity in Miami in Q4 2022
There were 401 new multifamily units that came online for Miami’s multifamily real estate market in Q4 2022, a steep decline after Q3’s historic delivery of over 3,000 units.
At the close of 2022, nearly 28,800 units remained in the pipeline.
The most significant project in development was Mana Wynwood-Residential Units, which will supply the market with almost 3,500 new units when completed (estimated completion is September 2024).
Market Forecast for Miami’s Multifamily Real Estate Market
Miami’s multifamily real estate market has seen a surge in investment, with year-to-date levels reaching unprecedented highs in Q3 2022. This is primarily attributed to three consecutive quarters of high deal volume, placing Miami’s multifamily market among the top 5 in the nation.
Despite expected increases in debt costs, the multifamily sector’s healthy supply and demand balance should likely keep deal volume strong throughout 2023
Takeaways for Multifamily Real Estate Investors
Reports show that Miami is, so far, the best-performing multifamily market in the country, with room to keep going.
Investors interested in a market with solid growth indicators may to do well to consider Miami a top choice for their portfolio.
Stay diligent, do your research, and happy investing.
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