Florida Rental Market: How Have Rent Prices Changed Since 2015?

Happy Early Halloween!

It's been a fantastic week as I wrapped up my first MarketPulse 360 presentation with J. Riley and the crew. 

Each time a create the presentation, I have extra slides I don't end up using in the final version. 🎬

This week, let's take a look at one that didn't make the cut, but is still valuable to review.

How has the Florida rental market changed?

(Click to enlarge image)

Rent price is a really important factor for any housing market.

Some Realtors view it as the competition, but it's just a tool in the housing tool belt. 🪚

What I've done with this chart is take all the metros in Florida that Zillow tracks since 2015 and visualized how rent has changed over time.

By the way, I think we can trust Zillow's rental data given the sheer number of rentals (on and off MLS) that end up there. 💡

I've indexed the rents which means they all start at 100 and it's measuring their change rather than looking at the $ rent so we get apples-to-apples.

If a market goes from 100 to 200, it's a 100% increase in the average rent there.

You'll see the name of the market and the average annual percent change to the right.

Sebastian is leading the pack with an annual growth rate of 9.7%. 🤯

This is well above any other market in the state. 

Looking at the relocation stats for the market, it appears that people in South Florida are moving slightly North (likely to find housing affordability) and it's driving up rents. 📦

26% of all people on Realtor.com viewing real estate in Sebastian were from Miami last quarter.

Sebastian is also a small market - population of ~27,000 as of 2023.

You can get bigger % growth when markets aren't large to begin with which is a good principle to keep in mind. ✅

Coming in next to last is Jacksonville at 5.8% average annual growth.

Our growth has been relatively low compared to other places in Florida.

A big part of this is we never became a "hot" market like Tampa and Miami. 🔥

Also, we've added a significant number of apartments over the years which has kept supply higher and price increases lower.

While it may be one of the lower numbers in the state, it's a healthy growth rate if you're a rental investor. 🤑

In fact, single family rentals have experienced an even higher growth rate as we have a shortage in rentals of that property type.

Finding Opportunity

Stats like these speak to how the affordability in a market is changing as well as the potential from an investors' point-of-view.

Buyer Affordability

While buying a house has increased in cost, it's important to recognize that renting expenses have gone up too. 😲

Sometimes this drives people to move out of the state if they can't afford to live here anymore.

The rest of the time it's a good reason to continue to help people understand what it looks like to buy a house knowing rents are just going up.

Focus on helping people with:

• the common misconceptions about buying a home.
• first time buyer programs that are available
• example scenarios so people can see the numbers
• the big picture over the next 5 years between buying a renting
• plans people can follow to save for the purchase
• ways to learn about and improve credit 
• and so on..

There's plenty of people who still don't know about the many things you assume are common knowledge. 😉

Investors

On the other side of the coin, these are some healthy returns for people looking to invest in real estate.

First, this chart highlights that you really couldn't miss regardless of which market you picked to invest in. 🎯

The average rent growth in Florida was 7.1% a year! 

Also, rent almost never goes down. 📈

You can see the steady path rents were on prior to 2020 and after the big jump up during the pandemic era, rents have taken a breather and you can expect the moderate levels of growth we had pre-pandemic.

Single family homes are still experiencing rent growth which doesn't show up in the chart.

And this is on top of the average price growth of ~9% a year investors and homeowners have enjoyed in the Sunshine State since 2015. 💪

Lastly, some of these smaller markets with higher growth rates could be emerging markets worth exploring further.

The growth in Miami, Tampa, and Orlando is impressive, but I expect the areas around these metros to experience growth given their relative affordability and growing interest from people relocating to the area. 

No matter how you cut it, there's opportunity everywhere.

Use the stats to make the most of it! 🚀

Dr. Alex Stewart
Founder

Still have questions? Here's a list of frequently asked questions and answers:

Q: How have rent prices in Florida changed since 2015?

A: Since 2015, rent prices in Florida have seen significant increases due to strong demand for rental properties, particularly in major Florida cities like Miami, Orlando, and Tampa. More recently, the median rent price has risen less dramatically year over year, reflecting more stable growth in the Florida real estate market.

Q: What factors have contributed to the increases in Florida rents?

A: Several factors contribute to the increases in Florida rents, including a high demand for rental units, an influx of new residents, and limited housing supply. The construction of new apartments and multifamily units has not kept pace with demand, leading to higher asking rents.

Q: Are there any signs of rent decreases in Florida?

A: While rent increases have been prevalent, some areas may experience rent decreases due to new construction coming online and increased vacancy rates. However, overall trends indicate that Florida rents are likely to remain high in the near future. There are more rent decreases in apartment complexes given the higher number of newly constructed apartments, while single family rentals are continuing to grow.

Q: How can landlords help manage rising rent prices?

A: Landlords can help manage rising rent prices by investing in property management strategies that enhance the value of rental properties, maintaining competitive asking rents, and keeping up with the latest rental trends to attract tenants while ensuring their investment remains profitable.

Q: What impact has the influx of remote workers had on Florida's rental market?

A: The influx of remote workers has increased the demand in Florida's rental market, as many individuals are relocating to Florida for its favorable climate and lifestyle. This has resulted in higher rents for rental properties, particularly in areas with good amenities and access to outdoor activities.

Q: What should renters know about the current rental trends in Florida?

A: Renters should be aware that rental trends in Florida indicate a competitive market, with median asking rents rising. It's essential for renters to research specific Florida cities, understand market dynamics, and act quickly when finding suitable rental units. Using a Realtor to find a rental can also help reduce costs and find properties that might otherwise be difficult to gain access to.

Q: How are new construction projects affecting the rental market in Florida?

A: New construction projects are aimed at addressing the high demand for rental units in Florida. While they may initially contribute to rent decreases in the surrounding areas, they ultimately help stabilize rents by increasing the overall supply of rental properties on the market. Given the increase in interest rates since 2022, there has been a slowdown in the development of new construction apartment complexes. This suggests that while rents have slowed their growth as the market adjusts to the new supply, we can expect higher rents after the market absorbs the new units.