As we wrote about in yesterday’s article, Florida was the top destination state for Americans relocating in 2022. To read more about this click here. Of course, this increased demand for housing from transplants moving here from other states is impacting both home purchase and rental prices. Recently, FAU reported an analysis of rental markets that may be overpriced and what is causing this. This report is known as The Waller, Weeks and Johnson Rental Index. This report is a production from the Florida Atlantic University Real Estate Initiative, Florida Gulf Coast University’s Lucas Institute for Real Estate Development & Finance, and the Alabama Center of Real Estate at the University of Alabama. Interestingly, this analysis showed that 9 of the top 21 most overpriced rental markets were in Florida. (Lakeland, FL came in ranked #21 with a 7.41% premium for rental prices.) We share these findings below:
Top 20 most overpriced rental markets
| Rank | City | Premium | Average Rent | Where Average Rent Should Be |
| 1. | Cape Coral, FL | +17.85% | $2,251.39 | $1,910.35 |
| 2. | North Port, FL | +14.72% | $2,457.48 | $2,142.06 |
| 3. | Miami, FL | +14.66% | $2,770.63 | $2,416.48 |
| 4. | Knoxville, TN | +12.38% | $1,717.83 | $1,528.62 |
| 5. | El Paso, TX | +10.26% | $1,460.57 | $1,324.67 |
| 6. | Charleston, SC | +10.23% | $1,897.78 | $1,721.58 |
| 7. | Akron, OH | +9.99% | $1,122.54 | $1,020.60 |
| 8. | Albuquerque, NM | +9.88% | $1,537.87 | $1,399.55 |
| 9. | Tampa, FL | +9.66% | $2,093.40 | $1,909.03 |
| 10. | Greensboro, NC | +9.42% | $1,413.98 | $1,292.29 |
| 11. | New Haven, CT | +8.59% | $1,803.83 | $1,661.21 |
| 12. | Deltona, FL | +8.42% | $1,891.45 | $1,744.61 |
| 13. | Jacksonville, FL | +8.30% | $1,757.23 | $1,622.56 |
| 14. | New York, NY | +8.13% | $3,062.22 | $2,831.88 |
| 15. | Palm Bay, FL | +8.11% | $2,019.12 | $1,867.70 |
| 16. | Orlando, FL | +8.09% | $1,995.62 | $1,846.25 |
| 17. | McAllen, TX | +8.07% | $1,179.35 | $1,091.33 |
| 18. | Bakersfield, CA | +7.84% | $1,680.08 | $1,558.00 |
| 19. | San Diego, CA | +7.64% | $2,990.96 | $2,778.57 |
| 20. | Charlotte, NC | +7.55% | $1,781.49 | $1,656.42 |
Summary
Rent affordability is only one aspect of the larger housing crisis impacting markets such as Florida. Although we continue to see stronger demand for rental housing throughout South Florida, there are several other reasons for the rising costs. For example, we have seen an increase in the amount of short-term or vacation rentals throughout our area. With sites such as Airbnb.com and VRBO.com becoming more popular, this leads to less available units in the overall rental market. In addition, we are also seeing more homeowner’s associations (HOA’s) implementing more rental restrictions for property owners.
We continue to see a strong demand for rental housing throughout the South Florida market. This may be a great time to add a rental income property to your investment portfolio. If so, contact Natasha at Live South Florida Realty, Inc. You will also want to download the Florida Home Search app for your smartphone or tablet as well.
