Rents across the state are trending down. South Florida rents are among the highest in the state. Researchers said the days of rapidly rising rents are probably over.
BOCA RATON – Just a year ago, nearly all the measured Florida metros were at double-digit premiums, but now renters in Florida could see cheaper rents as most of the measured cities are showing signs of rents trading either at a discount compared to long-term pricing trends or premiums of less than 1%, according to researchers at Florida Atlantic University and two other schools.
Rents in Palm Bay and Jacksonville are below their long-term pricing trends, end of April data from the Waller, Weeks and Johnson Rental Index shows. In Palm Bay, rents are at a -.39% discount with the typical unit in the area renting for $1,979.10. For Jacksonville, rents are at a -.15% discount with the average unit renting for $1,743.66.
“While these measures are small, they are a positive sign of where the rental market could be heading in the future,” said Ken H. Johnson, Ph.D., real estate economist with FAU’s College of Business. “These Florida cities are renting at a discount compared to their historical averages and others appear to be heading in that direction, suggesting that rental markets around the state are stabilizing.”
The Waller, Weeks and Johnson Rental Index, a part of FAU’s Real Estate Initiative, examines where the average rent is in the 100 most populated metropolitan areas in the United States and compares it to where rents should be based on statistical modeling of historical rental prices. Johnson, along with fellow researchers, Shelton Weeks, Ph.D., of Florida Gulf Coast University, and Bennie Waller, Ph.D., of the University of Alabama, also measure average yearly increases, monthly increases, and how much money the typical household needs to make to avoid paying more than 30% of their income toward rent.
Premiums in other measured Florida cities are edging back toward historical norms. Rents are at a .34% premium in Deltona; .35% premium in Orlando; .48% premium in Cape Coral; .66% premium in Lakeland; .79% premium in North Port; and 1.01% premium in Tampa.
“South Florida, however, remains a problem child in the state in terms of rent growth,” Weeks said. “Premiums in the Miami metro area are the highest among measured metros in the state at 4.19%.”
All three researchers agree that the days of rapidly rising rents are probably over. However, the new higher rents will cause affordability issues for quite some time to come as incomes race to catch up with the new rent levels.
“Overall, 18 metropolitan areas around the country are trading at a rental discount, and it appears much of the country is heading in the same direction,” Waller said.
© 2024 Florida Atlantic University
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Author: amyc