Florida Recovery Takes Shape, but Concessions Cloud the Outlook
Florida’s multifamily market offers a clear example of the recovery beginning to take shape across much of the Sunbelt. Deliveries have slowed, apartment demand has accelerated, and average occupancy has started to recover.
Yet the rebound remains incomplete. Occupancy is still well below its typical range, demand continues to rely heavily on lease concessions, and rent performance has not yet followed occupancy higher.
Florida multifamily is in the early stages of recovery, but important challenges remain.
Methodology notes: All figures refer to conventional properties with at least 50 units unless specified otherwise. Average effective rent refers to rents on new leases.
Supply Relief and Strong Absorption Tighten the Market
The first signs of tightening have appeared in the balance between supply and demand. Deliveries have declined significantly. Just more than 42,000 new units were delivered across the state over the last twelve months. That was 40% lower than in the previous 12-month period and represented the fewest new units for this portion of the calendar in four years.
The reduction in deliveries was widespread. No Florida market saw an increase in new supply year-over-year. Among primary markets, the slowdown was most visible in Tampa. The approximately 6,800 new units delivered over the last year were nearly 50% lower than in the previous 12 months.
The slowdown was much needed for a state that had been at the tip of the spear in development activity over the last five years. Helpfully, alongside the construction pipeline relief, apartment demand continued its multi-year uptrend.
About 90,000 units were absorbed statewide over the last year. That was the highest total of the last decade and more than double the previous 12-month total. Recent improvement in net absorption was nearly as widespread as the pullback in new supply. However, primary markets have led the way.
Orlando and Tampa each saw year-over-year net absorption roughly double. For Miami – Fort Lauderdale, net absorption went from less than 4,000 units from May 2024 through April of 2025 to more than 21,000 units in the last 12 months.
Smaller markets such as Fort Myers – Naples, Lakeland – Winter Haven, Palm Beach, Pensacola, and Sarasota – Bradenton also made strong progress in recent months.
The robust net absorption has come as economic performance and population growth have moderated from post-pandemic highs but still generally run ahead of national trends. Wage growth has outperformed the nation, and Florida has been one of the few states to see wage growth outrun inflation.
Planning on attending or exhibiting at Apartmentalize? Come see us in Booth 1900 to talk about data and how we can help your business!
Occupancy Improves, but Concessions Pressure Rents
The improved balance between deliveries and absorption has allowed average occupancy to begin recovering. A 5.6% gain over the last year ended a streak of three straight 12-month periods of decline.
Even after the recent improvement, overall average occupancy ended April at just 89%. For properties that were already stabilized 12 months ago, average occupancy ended April at about 93%. Both occupancy metrics are a reminder that significant ground remains to be regained after the supply – demand imbalance of the last few years.
Occupancy below its normal range has been one headwind for rent growth. Another has been lease concessions. About one-third of conventional properties in Florida finished April offering a discount for new residents. That rate of availability was up 30% from a year ago and put the state well above the national availability rate.
In addition to concessions being widespread, the average discount value also rose in recent months. After a 16% year-over-year increase, the average concession value ended April at around five weeks off an annual lease.
Both lease concessions metrics are above their pandemic-era peaks by a wide margin. The most concerning scenario would be widespread, generous discounts paired with weak absorption. Florida has avoided that outcome so far.
Lease concessions have at least come alongside very robust apartment demand. However, the discount environment calls into question the sustainability of net absorption without discounts.
These headwinds contributed to a 2% decline in average effective rent for new leases over the past 12 months. That decline all but wiped out the 2.2% appreciation from the previous period.
Rent performance has not been uniform. Positive growth has been limited to the Class A segment. Class A posted a 2.3% 12-month gain, barely half the increase from the previous period but also the only gain for any price class.
Struggles have been especially pronounced for the Class D subset. A 5.2% decline in the last year was much larger than even the 2.7% slide for Class C. The workforce housing portion of the market has maintained absorption momentum but has seen the largest increases in concession availability and concession value in recent months.
Recovery Is Underway, but Not Yet Self-Sustaining
Florida has become a useful microcosm of the current multifamily cycle. New supply has receded, apartment demand has strengthened, and average occupancy has begun to recover from its recent trough.
Even so, the recovery is not yet fully self-sustaining. Robust absorption has coincided with unusually widespread and generous lease concessions, especially in the workforce housing segment. Those discounts, combined with still-low occupancy, have kept rent growth under pressure.
For Florida and other high-supply Sunbelt markets, a full rebound will take more time. The important shift is that recovery is no longer speculative. It is beginning to materialize, even if the path remains uneven.
Disclaimer: All content and information within this article is for informational purposes only. ALN Apartment Data makes no representation as to the accuracy or completeness of any information in this or any other article posted on this site or found by following any link on this site. The owner will not be held liable for any losses, injuries, or damages from the display or use of this information. All content and information in this article may be shared provided a link to the article or website is included in the shared content.
