Just a year ago, nearly all Florida metro areas measured had double-digit premiums, but now renters in Florida could see cheaper rents as most cities measured are showing signs of rents trading at a discount compared to long-term price trends. or premiums of less than 1%, according to researchers at Florida Atlantic University and two other schools.
Just a year ago, nearly all Florida metro areas measured had double-digit premiums, but now renters in Florida could see cheaper rents as most cities measured are showing signs of rents trading at a discount compared to long-term price 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 price trends, late April data from the Waller, Weeks and Johnson Rental Index show. In Palm Bay, rents are discounted by -0.39% and the typical unit in the area rents for $1,979.10. For Jacksonville, rents are discounted by -0.15% and the average unit rents for $1,743.66.
“While these measures are small, they are a positive sign of where the rental market could be headed in the future,” said Ken H. Johnson, Ph.D., real estate economist at the FAU 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 across the state are stabilizing.”
The Waller, Weeks and Johnson Rent Index, part of the FAU Real Estate Initiative, looks at where the average rent is in the 100 most populous metropolitan areas in the United States and compares it to where rents should be based on statistical models 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 annual increases, monthly increases, and how much money is spent. What a typical household should do to avoid paying more than 30% of their income in rent.
Premiums in other Florida cities measured are returning to historical norms. Rentals are at a 0.34% premium in Deltona; 0.35% premium in Orlando; 0.48% premium in Cape Coral; 0.66% premium in Lakeland; premium of 0.79% in Puerto Norte; and 1.01% premium in Tampa.
“However, South Florida continues to be a problem in the state in terms of rental growth,” Weeks said. “Premiums in the Miami metropolitan area are the highest among measured metropolitan areas 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 as incomes compete to meet the new rent levels.
“Overall, 18 metro areas across the country are trading at rent discounts and it appears much of the country is headed in the same direction,” Waller said.
-FAU-
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