Are rents finally slowing down in South Florida?
South Florida Sun-Sentinel • Aug 30, 2022 at 7:00 amAfter a year of dramatic rent hikes, it looks like rent growth could be finally starting to slow down in South Florida, according to recent rent index.
Researchers at Florida Atlantic University, Florida Gulf Coast University and the University of Alabama analyzed a number of metropolitan areas across the United States and found that some areas, among them South Florida, are seeing slower rent growth than before.
“Rents are still increasing but the rate is a lot slower,” said Ken H. Johnson, real estate economist with Florida Atlantic University. “In a lot of the cities, we noticed that a lot of those increases came in the first six months of the past year.”
Rents in South Florida increased by 24.61% in July when compared to the year before.
However, the rate of growth has started to slow down: On average, rents have grown about 8.39% in the past six months, compared to a growth of around 16% the six months before that, according to the Waller, Weeks and Johnson Rental Index.
Other areas have seen a cooldown in the rent growth: Fort Myers, Sarasota-Bradenton, Jacksonville and Port St. Lucie.
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“We still expect rents to go up but not at the same rate. It’s a good sign that we are going in the right direction,” said Johnson, adding that for renters going to renew leases, it’s possible that rent hikes may not be as overwhelming as they were previously.
Despite the positive signs of slower pace of growth, it doesn’t mean that the affordability crisis is coming to an end.
Rents still are expected to increase, though the rate of that increase will likely not be as drastic as before.
South Florida renters are paying about 21% more in rent that they should be based on the long-term pricing trends. The current average rent is $,2841, or $495, more than what rent should be based on past historical trends.
“Regardless of these shifts, consumers across the country look to be in for a prolonged period of unaffordable rental prices,” said Johnson.
Affordability remains a concern for many renters. An analysis on Google searches by Conductor, an SEO and content marketing technology company, found that over the past year, the search for “affordable housing” in various cities in South Florida has skyrocketed as rents have grown:
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- “Affordable housing in Boca Raton” increased by 800%.
- “Affordable housing in Fort Lauderdale” increased by 324%.
- “Affordable housing in West Palm Beach” increased by 129%.
- “Affordable housing in Miami” increased by 122%.
“We are going to be in an affordability crisis until we build enough doors to live behind,” said Johnson.