In December 2022, rents decreased in 71 out of 100 largest US metropolitan areas, which could indicate that the country is gradually coming out of the rental crisis. Florida markets, however, are still overvalued, and the local rates are too high for many potential residents.
Researchers from the Florida Atlantic University, the University of Alabama, and the Florida Gulf Coast University calculate the Waller Weeks and Johnson Rental Index that shows how the actual rent is different from projections based on historical data.
According to this Index, last December, the rent premium was the highest in the Cape Coral – Fort Myers area in Florida, where tenants paid 17.85% more than could be expected. The average rent in the abovementioned period reached $2,251 per month, which is 1.25% more than in November 2022. The North Port – Bradenton metropolitan area ranked the second (overvalued by 14.72%), and Miami, the third (14.66%).
One of the reasons for such rental growth in December is considered to be Hurricane Ian that destroyed many properties in Southwest Florida, thus reducing the supply in the house rental market. It is unlikely to normalize soon.
Professor Ken Johnson, Economist at the Business College of the Florida Atlantic University, warns against excessive optimism. Although the rent growth is slowing down, the rates are by no means reducing, he notes. Housing affordability will remain a problem until household income approaches the increased rates.