Rent prices in South Florida have skyrocketed this year. They are the highest it has been in years, and it doesn’t look like there will be a drop anytime soon.
According to Redfin, rent prices increased by 36 percent in West Palm Beach. NBC Miami reported that South Florida renters struggle to find ways to pay their rent.
Since the pandemic’s start, Miami rent prices have increased 10 percent higher than expected. That means an extra few hundred dollars for tenants out of their pocket.
According to the online renting website Zumper, the median rent price in Miami is $2,200. That equates to an extra $475 per month for renters.
They also report that there is a 25% increase in year-over-year change. 41% of homes are Renter-Occupied Households, while 59% belong to Owner-Occupied Households.
Generally, the prices seem to decrease further North to St. Lucie County, where their average rent price is $1,600 per month.
Real Estate agents in the South Florida area report that more people want to move out of Florida into other states because of the unwavering rent prices.
What’s the reason for the rent increase?
There are many factors of why rent has increased so drastically in Florida.
The primary reason is the lack of available homes for sale. Investors have been purchasing more homes – renting them out or keeping them vacant until the prices get higher – and then flip them for a more significant profit.
According to Zillow, about 10 percent of homes were vacant in the third quarter of 2018. That is almost double from the first quarter of 2010 which was about 5 percent.
The other reason for the rent increase is that many homes on the market were used as rentals have been bought and turned into short-term vacation homes or Airbnb locations. They aren’t long-term rentals, causing more of a demand for homes, especially in popular areas.
Another factor is the influx of people moving to Florida. Many college students are enrolling at colleges around South Florida. They need housing, which doesn’t help with increasing rent prices.
Other factors affecting rent prices include:
- Wage increases.
- Higher land and construction costs.
- Demand for rentals and increased home values.
Is it better to buy than rent now?
Both home and rent prices are rising, but homes are less affordable than they have been in just over three-quarters of the U.S. In big cities (and areas like South Florida), it’s cheaper to rent than to own.
But like I’ve always said, if you’re trying to get somewhere in your life, if you’re trying to progress financially, then you shouldn’t buy a home. It might be expensive to rent where you live but it’ll be more expensive to finance and buy a house.
“Rent where you live, Own what you can rent to others”– Grant Cardone on Owning VS. Renting
If you want to learn more about owning vs. renting check out my youtube video below.