The 2018 Mid-Year Outlook released by Freddie Mac indicates that the multifamily market can expect more of the same healthy gains in 2018 that it experienced the year before. In 2017, nearly 396,000 apartment units were completed — a figure that is double the projected average for the long term.
National Growth Expected to be Strong
The Freddie Mac report also noted that vacancy rates are lower than the historical averages that are typically seen. This figure is expected to climb higher, but currently, the additional supply is slightly outpacing demand. For 2017, vacancies rose 4.8 percent and 60 basis points.
Though the healthy labor market is fueling rising rents, the rates are growing slowly. The report also attributed this growth to the job market and to renters who opt to live in a community that meets their needs for a particular lifestyle. This segment is often made up of families with two incomes and no children.
Data supports steady growth in multifamily, but we can’t ignore the slight increase in the single-family housing market. According to Multifamily Executive, “Apartment List expects homeownership rates to stabilize in 2018, or even increase slightly, as more millennials purchase homes.” However, affordability is still a major factor in long-term growth.
How is Jacksonville Affected by This Trend?
Not surprisingly, this trend is evident in Jacksonville as well. According to the Jax Daily Record, the Jacksonville metro area largely reflects the national outlook. It has a growing inventory of multifamily dwellings, shrinking vacancy rates, and rising rents. When the robust job market and its related growth are factored in, the outlook for the city of Jacksonville in 2018 and beyond is positive.
One of the most compelling factors that continues to draw people to the city is the economic prosperity it enjoys. With unemployment at only 3.6 percent and about 23,000 jobs added in the last 12 months, Jacksonville is now seeing a vacancy rate of 4.3 percent. This has, in turn, pushed rent up by an average of 4.4 percent. In 2017, the multifamily market saw the average rent soar to more than $1,000.
With headquarters in Jacksonville, FL, Live Oak Contracting has its finger on the pulse of the area’s market conditions and the right opportunities for owners and developers. With over 50 years of multifamily and commercial construction experience, trust our award-winning team to deliver your next project on time and in budget. For more information on our services or to learn more about our process, contact us.