UNDER CONSTRUCTION UNITS

If new construction leads to an over-supply of units, it can result in low asking rates due to competition and potential challenges for investors. Conversely, if new construction aligns with or slightly lags demand, it will support a healthy balance and potential for growth. Assessing this balance is crucial in understanding the impact on the multifamily market.

As reported by Costar Group inc. The Tampa Multifamily market has experienced a significant influx of new supplies, with 6,700 units completed in the past year and an added 19,000 units currently under construction. The ongoing construction is a 9.0% increase in existing inventory, well above the national average of 5.6%. As a result, the market vacancy rate is expected to further increase to around 9% in the next two years, according to CoStar's forecast.

While it's true that the supply of new units in the Tampa multifamily market has outpaced demand in the second quarter of 2023, it's reassuring to know that new construction capital is wisely being distributed to submarkets with the highest potential. Specifically, Pasco County, Southeast Tampa, South Pinellas, and North Tampa are receiving significant attention, which is clear sign of the direction of Tampa's multifamily market expansion.