Expensive! Florida’s most overrated rental market in the United States

When Jamaican Shaneeka Robinson jumped on the first Jet Blue flight from New York to South Florida in June, she expected a smooth transition to her one-bedroom rental in Fort Lauderdale. She was running away from the hustle and bustle in search of a better work-life balance.

When he achieved it, however, it was not what he expected. “The place looked good, but there was no running water in the apartment. My landlord said he could no longer rent the property and it would take weeks to fix. ”

With that disappointment, Shaneeka rented an Airbnb room, hoping to find something soon. Two weeks later, she got a room at someone’s home for $ 800.00 at Plantation. It is now September and the 27-year-old is still in the one-bedroom unit, trying to find a cheap home to rent.

– Announcement –

Shaneeka’s story of finding affordable rentals in South Florida is not unique. The cost of rental properties in the region has skyrocketed. Earlier this year, real estate economist Ken Johnson told ABC News that “the Miami subway, which runs as far as Palm Beach County, is priced about 30% higher than this fare travel to. long term. Miami rental markets are about 22% above their long term premium. This makes it the most expensive market in the country. ”

In May, Bloomberg reported the results of researchers from Florida Atlantic University (FAU) and Florida Gulf Coast University, who said that “South Florida is the most overrated rental market in the United States.” The report states that renters are “paying 22% more than they should.”

And according to WPTV, Realtor.com reported last year that “the Miami-Fort Lauderdale-West Palm Beach area is the third fastest growing rental market in the country among metropolitan areas.”

But what makes the rental cost skyrocket? The answer lies in the basic economic principle that prices will rise when demand is greater than supply. And when prices rise, consumers are forced to ask for alternatives that also raise prices if there is less supply for the alternative.

There is an influx of national and international migrations to the area and these people are in need of housing. This demand has caused house prices to rise in the area because housing inventory is low. Higher prices cause homebuyers to demand more rental units as alternatives, and with less supply of such housing solutions, rental prices hit the roof.

People move to Florida due to the good weather, cultural diversity, lower cost of living, and zero income tax policy. The New York Post reports that “21,546 New Yorkers changed their driver’s license for the Sunshine State” for the first four months of this year. This is a 12% increase over the 2021 data for the same period. 61,728 New Yorkers moved to Florida in 2021.

Florida was also the final destination for 38,590 immigrants, according to data from the Census Bureau, according to Florida Politics.

Another factor that keeps housing solutions high is the impact of real estate investors. These buyers do not usually live in the purchased home. They buy, fix and sell / rent, knowing that they can set high prices to meet market demand.

The impact of Airbnb’s business also pushed rental inventory down, causing a supply problem.

Apartmentlist.com reports that Miami rental prices have risen 66% from last year’s rates, where a bedroom costs $ 2,700. If you need two bedrooms, expect to pay around $ 3,600.

In Fort Lauderdale, rents increased 41% year-over-year. A bedroom could cost $ 1,975 and a two bedroom cost $ 3,024.

Seven of the top ten highest rental prices in the state are found in South Florida, based on average rent according to floridapropertymanagement.com. The list includes:

  1. Weston
  2. Boca Raton
  3. Fort Lauderdale
  4. Miami Beach
  5. Coral Gables
  6. Doral
  7. You love me
  8. Tampa
  9. Orlando
  10. Jacksonville

Real estate agent Andre Barrett, who has been in the business for 20 years, believes the current rental challenge will continue for another 24-36 months. “Rents are based on supply and demand. Currently, the supply is very short and the demand is very high. It’s strictly a question of supply and demand and I don’t see anything on the horizon that will affect the supply side in the near future, “he pointed out.

It hasn’t made many rentals in recent times due to current market conditions. “It’s a very competitive market and we need to make sure we pre-qualify the clients we invest our time in to secure a property. Over time it’s getting harder and harder, ”she told CNW.

With the market in the hands of property owners, they have the power to decide who qualifies to rent their property. Barrett said in some cases landlords accept the higher down payment than the minimum standard renters are used to. “There are property owners who will accept up to six months’ rent in advance as a qualification to rent their homes. And in some cases, it is the potential renter who makes the offer. Not many people can afford several months’ rent as a prepayment, but there are a few out there who can. When a landlord sees up to 50 bids, the best one wins, “she said.

But with this trend expected to continue over the next three years, according to most experts, what can real estate agents say to their clients?

Barrett said he explains the conditions in the market and how an offer must be made to be accepted. “We will explain the reality of the South Florida rental market and how an offer should be structured.” She also tries to gather information from the renter’s agent. “How many offers and screenings have they had? What is important for the landlord? This is trying to measure the general climate of the situation ”.

The CEO of the Barret Group believes that for this situation to end, more inventory will be needed in the system. “More apartment complexes and more funding for housing programs are needed to keep rents low for some time. The bottom line is more inventory. ”

For renters facing hardship and eviction, there may be resources to help county and city governments.

According to the website www.rentalassistancepbc.org/, the Palm Beach County Community Service Program is still accepting applications, but is temporarily closed due to the “high volume of applications”. The portal will reopen on October 3, 2022.

In Broward County, rental assistance is available from the Broward Emergency Rental Assistance Program. In May, the county received $ 22 million in federal funding to assist people who are rented or unable to pay.

Broward towns with specific rental assistance programs include:

Lauderhill and Lauderdale Lakes

If you live in Miami-Dade, the city of Hialeah has two programs to help you:

The Housing Assistance Network of Dade (HAND) program is one of several communities to receive the Emergency Solutions Grant (ESG) from the Department of Housing and Urban Development (HUD). The funds help people and families affected by the COVID-19 public health emergency. The city also has an emergency rental assistance program (ERAP) to help people.

Miami-Dade County has two programs that offer assistance to renters:

The Emergency Rental Assistance Program (ERA) was closed on August 8 due to available funds, but they requested additional funding.

County accepts applications for its 2.4 Emergency Rental Program (ERAP 2.4)

Keep in mind that there are requirements for getting help from these programs and that assistance is provided as long as funding is available.

The Financial Protection Bureau (CFPB) offers advice and help on its website in the event of eviction.

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