London Foster Realty at Dadeland
Liz Kenneally | Realtor

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Miami's multifamily rental market, which saw a significant boom in recent years, is now experiencing a  noticeable slowdown. This change is attributed to several key factors impacting both developers and renters.

Impact of Higher Borrowing Costs

One of the main reasons for this slowdown is the rise in borrowing costs. The Federal Reserve has increased interest rates, making it more expensive for developers to finance new apartment projects. This has resulted in fewer construction starts as developers struggle to secure affordable loans. 

Rising Costs of Construction

In addition to higher borrowing costs, the price of construction materials and labor has surged. These rising costs have made it more difficult for developers to start new projects. Some developers argue that the increased cost of materials, such as cement, has a more significant impact than the interest rates themselves. This combination of factors has led to a reduction in new multifamily construction starts.

Increased Supply and Higher Vacancy Rates

Miami has seen a substantial influx of newly built apartments, which has led to higher vacancy rates and slowed rent growth. In the first three quarters of last year, over 13,000 units were completed in South Florida, surpassing the total for the previous year and increasing the vacancy rate. This influx of new units has saturated the market, making it difficult for landlords to maintain high occupancy levels and competitive rental rates

Specific Multifamily Developers Impacted

Several developers have been significantly affected by these changes. Michael Neal, CEO of Kast Construction, has noted the impact of the restrictive lending environment on their projects. Kast Construction, a major player in Florida, has seen a decrease in their volume of multifamily projects due to the difficulty in obtaining construction loans.

Jeffrey Burns, CEO of Affiliated Development, highlights similar challenges, particularly for affordable housing projects. Affiliated Development, which blends market-rate and affordable units, has faced hurdles with rising costs and limited financing options, affecting their ability to start new projects.

Rafael Aregger of Empira Group, a Swiss developer, is also experiencing the slowdown. Empira Group plans to deliver several new apartment buildings in Miami by 2026, but they acknowledge that the current market conditions have resulted in slower lease-up speeds and lower rent growth expectations.

Market Saturation and Lender Caution

 Despite a continued strong demand for rental housing driven by migration to Miami, there is a sense of market saturation. Lenders have become more cautious, slowing down the pace of new construction starts. The geographic constraints of Miami also limit available land for new developments, further contributing to the slowdown.

Affordability Challenges

Affordability remains a critical issue in Miami. The median asking rent has increased significantly in recent years, outpacing wage growth. This disparity makes it difficult for many residents to afford housing, which in turn affects the rental market dynamics. According to Ken Johnson, an economist at Florida Atlantic University, while rent increases have moderated, they are still high relative to income levels, leading to prolonged affordability issues.

Other Cities Experiencing Slowdowns in Multifamily Rental Buildings

The multifamily rental market slowdown isn't unique to Miami; several other cities in Florida and across the United States are experiencing similar trends. Below is a graph representing the multifamily newly constructed units and absorption rates for various cities in 2024 accoding to the 2024 Matthews Multifamily Market Report Review and Outlook, CBRE 2024 U.S. Real Estate Market Outlook and 23Q4 Multifamil - South Florida Market Report.

 Multifamily newly constructed units and absorption rates for various cities in 2024
Miami: With 13,000 newly constructed units and an absorption rate of 60%,  Miami's market shows signs of oversaturation, leading to higher vacancy rates. 

Austin: The city is facing an oversupply with 28,000 new units and a low absorption rate of 21%.

Charlotte: Similar issues with oversupply and an absorption rate of 45% for 10,000 new units.

Denver: 15,000 new units with a 40% absorption rate, reflecting high vacancy rates.

Los Angeles: Despite 12,000 new units and a 55% absorption rate, high construction and borrowing costs are slowing down new developments.

Orlando and Tampa: Both cities face similar challenges with 11,000 and 9,000 new units and absorption rates of 50%.

Seattle: Experiencing high levels of new construction (14,000 units) but only a 47% absorption rate.

In summary, Floridian cities, Miami, Orlando, and Tampa, along with others nationwide, are experiencing a slowdown in the multifamily rental market due to higher borrowing and construction costs, increased supply, market saturation, lender caution, and affordability challenges. These factors are reshaping the landscape for both developers and renters, marking a significant shift from the rapid growth seen in recent years.

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What my clients are saying  

Efficient, Effective, and Ethical! Working with Liz Kenneally was an absolute pleasure. Her efficient and effective approach to real estate made the entire process seamless and stress-free. From the moment we met Liz, we knew we were in good hands. She took the time to listen to our needs and preferences, ensuring that we found the perfect home in South Miami. Liz's commitment to ethical practices and transparency gave us peace of mind throughout the transaction. We highly recommend Liz to anyone looking for a trustworthy and reliable realtor in Miami.

 

~ Michael and Jennifer D.

I hired Liz Kenneally to lease out my apartment, and within just 1-2 weeks, she secured long-term tenants who have been a great to work with for the past three years. Her efficiency, professionalism, and warm demeanor made the entire process seamless. Liz understood my needs and executed flawlessly. I couldn't be happier with the outcome. I wholeheartedly recommend Liz!

 

~ Sofia I.

Finding office space for my company was made effortless thanks to Liz Kenneally's exceptional service. Referred to her by a trusted source, I quickly understood why she comes highly recommended. Liz guided us through every step with professionalism and expertise, ensuring we secured the perfect space to meet our needs. The office space exceeded my expectations, boasting a prime location, generous square footage, and excellent amenities. Liz's attention to detail facilitated a seamless transition into our new workspace. Her responsiveness and proactive communication made the leasing process a breeze. Working with Liz Kenneally was a pleasure, and I wholeheartedly recommend her to anyone in search of commercial real estate. Five stars all around!

 

~ Paul M.

Professionalism Personified! Liz Kenneally is the epitome of professionalism. Her attention to detail, proactive communication, and tireless work ethic set her apart from other realtors. Liz guided us through the process of buying our dream home in Coral Gables with ease and confidence. She was always one step ahead, anticipating our needs and addressing any issues promptly. Liz's commitment to excellence and integrity made us feel confident and reassured throughout the entire transaction. We cannot recommend Liz highly enough!

 

~ James and Amanda R.

Liz Kenneally proved to be an exceptional real estate agent. Her expertise in Dadeland area homes, our preferred locale, was truly impressive. Liz's dedication to understanding our needs, preferences, and budget constraints was evident throughout our interactions. She tirelessly worked to find us the perfect home, keeping us updated and promptly addressing all our questions. Liz made the entire process enjoyable, turning house hunting into an adventure. I enthusiastically endorse her to anyone in the market to buy or sell. Thank you, Liz, for your outstanding service!

 

~ Camila I.

5 Stars for Responsiveness, Negotiation skills, Professionalism and communication, Market expertise, Was on point at every turn, from offer to closing.

 

~ Jordi B

Liz went above and beyond to market our property effectively, attracting a flood of interested buyers. Her attention to detail and commitment to showcasing our home in the best possible light truly paid off. We couldn't believe it when offers started pouring in, and even more so when the final sale price exceeded our initial expectations! It was the highest sold price in the community! Liz was responsive, proactive, and always had our best interests at heart. Her negotiation skills were impeccable, ensuring that we got the best possible deal for our property.

 

~ Willy and Gloria P.

Liz was the listing agent for a Miami property I called on and made an appointment to see . That's how it all started.I wasn't working with any agent and I told Liz I didn't want to commit to anyone. She stated she understood, nevertheless, she was relentless in keeping in touch with me. Finally, in one of her phone calls, Liz asked me if she was working hard to get my business ? I said yes, of course. Then she stated, "Imagine, what I am capable of doing in finding and negotiating for you in a tough and competitive Miami market?". That clinched it !

 

~ Arile R.

I want to thank this wonderful Lady that stuck with me until I found just the right place. I am very satisfied and you will always have a friend here. Thank you for everything Liz, you're the best.

 

~ Manny

We trusted her strategy and ended up buying the property that we were initially turned down on. You can say Liz turned that No into a Yes for less money! She is relentless. Thank you, Liz, you are a hard worker, trustworthy, on top of your game and simply a pleasure to team up with you

 

~ Alex Y.

As a business man, one of the things that impressed me about Liz is is her negotiation skills, patience and cool under pressure. She looks for a win-win even though at times we were just being one sided. Liz reminded us it's a sellers' market with properties selling quickly at or little above asking price in the area we wanted to buy.Whatever we weren't familiar with, Liz simplified it so we felt comfortable and understood the transaction.

 

~ Vincent S.

"...One of her best qualities is her ability to stand back, listen to your needs, present you all the alternatives and let you make the original decisions. She is not assertive with her opinion but when she says you better listen because it will be in your own best interest..."

 

~ Ioannis L.

I had a great experience with Liz in the sale and purchase of my new home. She was always available to answer questions with great confidence and knowledge. I consider her a personal friend since we met, through the process of buying this home. Highly recommend her to anyone looking to sell or buy.

 

~ Maria D

Ms Liz Keneally was a angel sent. I was going through personal hardship. And having a hard time not only selling The property but with the result of impending foreclosure. Which at the time was a very difficult time in my life. And she came along. And got a contract within a week. And I have nothing but gratitude towards her and her team. That treated me and my children like family.

 

~ Xenia L.

Liz has been a wonderful real estate agent for us. She is an excellent communicator, and communicates in a very timely manner. Liz provided easy to understand comparisons when we had multiple offers for the property that we were selling. Liz makes sure that all the details are taken care of, and most importantly perseveres in resolving the many issues that arise in a real estate transaction. We have been extremely happy with the work that Liz has done for us. We would highly recommend her for anyone who is seeking to sell or buy property.

 

~ Gary N

As a first time home buyer, I was nervous and worried about being taken advantage of. Liz calmed my nerves and guided me through the process. She was easy to communicate with and took the time to educate me.There were times, we had to negotiate and Liz always made sure to keep the deal alive, while protecting my interests. I have only wonderful things to say about her and would work with her again.

 

~ Sarah S.

Liz was professional from the exploratory stages of home buying to its completion. As a first-time buyer, I was looking into foreclosures. I did not expect the unexpected to say the least. From negotiations to paperwork, I am truly grateful for Liz's knowledge and skills. She guided me through the process and stood by my side when delays arose and frustrations even larger. Her calmness and verbal prowess ultimately helped me secure my very first home! Thank you, Liz!

 

~ Hennifer M

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