Miami-Dade

Perpetually Low Vacancy Supports Development;

Budding Possibilities Beyond Urban Core
Employment Trends
Steady job and household growth fill new units countywide amid ele- Absolute Change Y-O-Y % Change

Total Nonfarm Jobs (thousands)

vated deliveries. Strong housing demand driven by improvements in the labor
48 4%

Year-over-Year Change
market and household formation will hold the metros vacancy rate near the
cycle low this year. Market demand will keep deliveries elevated in 2017. Com- 36 3%
pletions are expected to more than double the 10-year average this year as
5,700 units come online. Most of the new rentals are rising in downtown as more 24 2%

residents obtain employment in this area. The high cost of single-family housing
12 1%
coupled with limited housing construction for first-time homebuyers will provide
a steady stream of renters. Outside of downtown, 2,200 Class A units will be 0 0%
opening across the county, most notably in the commuter residential areas of 13 14 15 16* 17**

Coral Gables and South Miami. Countywide, eight years of positive absorption
are keeping vacancy below 3 percent and will allow the annual market effective
rent to rise again this year. Supply and Demand
Completions Absorption Vacancy

Performance upside holds strong, gaining greater traction from buyers. 8 4%

Units (thousands)
Robust rental growth will boost apartment appreciation and preserve investor
6 3%

Vacancy Rate
sentiment in 2017. Class B and C assets are poised to perform well this year.
Intense bidding and a swell in pricing may widen buyer and seller expectations, 4 2%
pushing more investors to tertiary submarkets. Investors in search of additional
upside potential may find suitable properties in East Little Havana, North Miami 2 1%
Beach and Miami Gardens. Lower monthly rents and curbed construction in
0 0%
these corridors will provide further revenue gains this year. In these submarkets,
13 14 15 16* 17**
assets trade with yields in the upper-5 to lower-8 percent range depending on
location and quality. Metrowide Class A units commonly trade roughly 100 basis
points lower in the 4 percent range. A surge in luxury development will grow Effective Rent Trends
interest among institutional buyers, supporting robust trading in this segment.
Metro U.S.
8%
Year-over-Year Change

2017 Market Forecast 6%

NMI Rank Strong demand drivers and sustained sub-3 percent va- 4%
15, no change cancy rates maintain Miami-Dades position.
2%

Employment The workforce will grow by 25,000 people this year. In 0%

up 2.2% 2016, Miami-Dade employers added 21,500 jobs, led by 13 14 15 16* 17**
the professional and business services sector.

Construction Elevated construction extends into its second year with Sales Trends
5,700 units the completion of 5,700 units anticipated for 2017. Last
Average Price per Unit (thousands)

year 6,100 apartments were delivered. $190

Vacancy Net absorption will nudge past completions this year, $160

down 10 bps pushing the rate 10 basis points lower to a tight 2 per-
$130
cent. Last year vacancy dropped 30 basis points.
$100
Rent Strong demand and tight vacancy will grow rents in
up 4.4% 2017, increasing 4.4 percent to $1,410 per month. Last $70
12 13 14 15 16*
year rent climbed 3.9 percent.

Investment Construction is ramping up on Miami Worldcenter this

year. Properties in the surrounding corridor will garner * Estimate ** Forecast
greater attention from investors in search of promising Sources: CoStar Group, Inc.; Real Capital Analytics
future returns.

35