In the last year, effective rent growth in Orlando was among the largest in the country amid healthy apartment demand. Multiple metros in Florida saw effective rent rise over 20% year over year, well over the national average.
Specifically, the Orlando MSA’s effective rent appreciated 26.6%. Yet, average effective rent of $1,740 per month in Orlando remained more affordable than other Florida markets such as South Florida and Tampa-St. Petersburg.
Orlando residents looking to become homeowners were priced out of single-family options and turned to renting. Looking forward, the market’s rent growth shows no signs of dropping. Over the next four quarters, effective rent is estimated to increase 18.4%.
Similar to other markets, Orlando is in the midst of an affordable housing issue. This boosted occupancy and demand for Class B and C properties, which saw 150 and 260 basis point increases at the beginning of 2022.
The leisure and hospitality sector largely supports the Class B and C demand. The sector experienced the largest year-over-year growth as employers such as Walt Disney World Resort and Universal Orlando Resort spearheaded hiring.
Economic growth in Orlando paired with its relative affordability compared to other Florida markets underpinned robust net-in migration to the metro. Approximately 36,400 more individuals moved to Orland than left in the last year.
Many new residents and developers turned their attention to South Orange County. The South Orange County submarket was responsible for over 41% of the market’s new inventory and led the other 14 submarkets in absorption.
From June 2021 to June 2022, South Orange County saw 2,000 net move-ins with a new lease turnover average of 25.5%. The submarket is home to a master-planned Lake Noma community, Marriott Vacations Worldwide’s corporate headquarters to relocate to the area.