Central Florida Multifamily Market Report
Orlando, FL
Market Overview
Demand for multifamily housing in Orlando, FL decreased towards the end of 2022 but has since picked up momentum. In fact, by November 2023, the demand had already surpassed the total demand for the entire year of 2022 by almost 50%. The decline in demand from renters was primarily attributed to financial reasons, with the rapid increase in rent prices in 2022 making apartments unaffordable for many. Concerns about the economy and job stability also heightened economic anxieties for others.
Despite rapid population growth, these factors significantly impacted overall demand. However, the outlook has been improving, and each quarter in 2024 is expected to be stronger than the preceding one.
Market Performance
The current vacancy rate stands at 10.9%, significantly exceeding the national average of 7.5% and nearing a 15-year high. It is anticipated to increase further, approaching the mid-11% range by the end of Q1 2024, driven by a substantial influx of new construction, with over 3,000 new units expected to be completed in that quarter. Orlando’s current construction pipeline is among the fastest in the nation, with roughly 12,4000 new units projected to be delivered by the end of Q4 2023. The year-over-year (YOY) rent growth has rapidly slowed down in the past few quarters and currently stands at an annualized rate of -3.3%, notably lagging behind the national average of 0.7%. Over the past 12 months, there have been 40 property transactions, amounting to a total investment volume of $1.7 billion.
Orlando By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 10.9%
- Rent Growth: -3.3%
- Delivered Units: 13,498
- Absorption Units: 6,008
- Sales Volume: $1.7B
Lakeland, FL
Market Overview
Lakeland, the smallest among Central Florida’s multifamily markets, comprises approximately 26,000 units. The multifamily market demonstrated outstanding performance in 2022, driven by population growth leading the state. However, the current supply has largely caught up to demand from renters year-to-date, resulting in an imbalance that has negatively affected asking rents.
Around 2,500 units have been delivered over the last 12 months, while a little over 1,700 have been absorbed.
Market Performance
Similar to other Florida markets, Lakeland has experienced a situation where the new multifamily supply has surpassed the rate of new renter demand over the past year. As of Q4 2023, this imbalance has led to a YOY increase in vacancy by 200 basis points, reaching 10.5%. Lakeland stands as the most budget-friendly multifamily market in the Central Florida region, boasting an average asking rent of $1,530 per month. New construction has played a pivotal role in shaping Lakeland’s multifamily market in recent years, and 2023 is set to establish new records for the number of newly completed units. The 12-month sales volume stands at $128 million, with the majority of transactions occurring in Q2.
Lakeland By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 10.5%
- Rent Growth: -0.3%
- Delivered Units: 2,504
- Absorption Units: 1,718
- Sales Volume: $128M
