Demand High in Sun Belt for multifamily developments

J.C. De Ona

 MIAMI, FL -- The national economy has been under a cloud recently, but the Sun Belt is shining bright, as the region experiences continued demand for multifamily developments from population growth.

While many U.S. cities fear an oversupply of housing, igniting vacancies and lagging demand, the Sun Belt is proving to be the contrarian to macro shifts.

Two expert sources share their expertise on how multifamily in the Sun Belt area is more insulated from general economic shifts.

Nathan Kaplan 

Centennial Bank Florida Division President J.C. De Ona, and Kaplan Residential Partner and Managing Director Nathan Kaplan do not see a slowdown in multifamily developments, even with rising interest rates.

 Why?

• Demand still outpaces supply to live in growth markets with prosperity in all economic sectors
• Rising interest rates are making homeownership less attractive to many, so multifamily is a clear answer, because population growth will not slow.
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•  The United States Census Bureau latest population tallies indicate burgeoning population growth in the Sun Belt’s largest metros from July 2020 to July 2021

 

• Atlanta welcomed 65,000 new residents in the last 12 months and the population is expected to surge to 8.6 million by 2050, a 43 percent increase
• Florida has grown by 300,000 residents from July 2020 to July 2021 – the state is more insulated due to continued population growth

• Investors/developers in a winning position:
• Kaplan is holding land and is being tactical around land acquisitions and opportunities, actively exploring joint ventures and development of multifamily on third-party-owned land
• Centennial’s leading lender applications in Florida are from multifamily developers, with no decrease in submissions
• The U.S. Bureau of Labor Statistics data reports that the price of construction materials is starting to tick downwards. In June, softwood lumber dropped 24.8% month-over-month, and other materials such as iron and steel were down 2.9% for the month
• The expected decrease in construction costs keeps developers off the sidelines

 

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