Florida positions itself as the best state to live in, and 808 new residents arriving here every day, according to statistics, seem to share this opinion. A real boom in the residential property market occurred in this state after the pandemic. For instance, the median price of a single-family house surpassed the last year’s level by almost 10% by November 2022.
Far from everyone can afford to own a home, however, so there is a shortage of supply in the house rental market. The rent in Florida increased by 36% from January 2020 through December 2022, despite a slight decline over the last four months of the previous year.
According to tentative forecasts, the demand in the house rental market should reduce slightly and the supply, on the contrary, is expected to increase, but the rents are not supposed to decrease considerably. A particularly drastic rental surge occurred in metropolitan areas such as Miami, Tampa, and Fort Myers. For instance, a one-bedroom apartment in Miami currently costs around $1,634 per month, and the median rent on two-bedroom apartments reaches $2,079 per month.
Such a growth exceeds the level forecast based on historic trends. According to the Waller, Weeks and Johnson Rental Index, which monitors this indicator, 9 out of 25 most overvalued US rental markets are located in Florida. These are Cape Coral (No. 1 in the ranking of markets with the highest rent premiums), Miami (No. 2), North Port (No. 3), Tampa, Orlando, Deltona, Palm Bay, Jacksonville, and Lakeland.
High rentals pose a risk to the state’s economy. In order to retain the current residents and attract new ones, they need to have an opportunity to rent a home. The Florida Legislature is planning to handle this issue at the 2023 session to understand what kind of support could be given to potential tenants, e.g., by incentivizing and accelerating construction.