• Operating conditions in Miami were more resilient to elevated supply than Florida as a whole, as robust underlying demand and strong economic underpinnings supported higher levels of absorption.
  • However, interest rate hikes led to a decline in asset sales, which was further compounded by sharply rising insurance rates. As operating and debt costs rose sharply, muddled asset values led to a stalemate between buyers and sellers.
  • Continued construction deliveries, combined with rising operating expenses and a lack of clarity about the future of the insurance market, should lead to sluggish transaction activity during the next year.

Additional Insights:

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Conditions in Miami over the latter half of 2023 were driven by factors seen elsewhere in the country that were amplified in the South Florida coastal metropolis.

Among them, a large pipeline of projects that should begin delivering soon putting upward pressure on vacancy rates and an investment market that continues to be impacted by skyrocketing insurance costs.

Supply, Demand, and the Big Insurance Question, one of Lument’s two Q3 2023 market spotlights, was developed in partnership with Rosen Consulting Group, and gives an in-depth look at the Miami market.

Each new quarterly national market report will be accompanied by market spotlights for two metros and it will all be available on our site within the Insights section by selecting “Research,” where it joins other research-based materials, like our recently released multifamily investor sentiment survey report.

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