Occupancy rates reached unprecedented levels throughout many markets in 2021, some of which saw rapid tightening after the 2020 downturn. However, no market saw a faster occupancy increase between the end of 2020 and the end of 2021 than Naples, Florida. This small southwest Florida market saw occupancy rates jump 400 basis points (bps) between 4th quarter 2020 and 4th quarter 2021. The resulting occupancy rate of 98.8% was among the nation’s tightest and set a new record for the local market. Naples is an interesting market that’s seen a lot of growth in recent years, both in terms of population and apartment supply. Naples is a well-known retirement destination and a market that tends to see an atypically strong 4th quarter leasing season. That 4th quarter strength is driven by “snowbird” demand, or residents who seek southwest Florida’s warm and sunny climate in lieu of the bitter cold weather found in their primary home markets (generally in the Midwest and Northeast, particularly New York and Chicago). Naples’ big occupancy surge is further impressive considering 954 units delivered in 2021. Although small in terms of volume, that accounted for nearly 3% of all existing inventory. Expect supply to remain a key theme through at least 2022 as well, with 1,274 units currently under construction (more than 4% of all existing stock).
