The Sunshine State is home to the most overvalued rental markets, according to a new study released by Florida Atlantic University (FAU).
In the new study, FAU partnered with researchers at Floria Gulf Coast University and the University of Alabama to analyze U.S. rental markets and spotlight where the national rental surge is impacting residents the most.
Researchers ranked the 25 most overvalued U.S. rental markets, and the top 5 cities with the highest rent premiums were all located in Florida.
The study showed that South Florida has the most overvalued rental market, with renters in Miami-Fort Lauderdale paying an average of $2,832 a month — 21.75% higher than what they should be paying based on the area’s long-term trends. Fort Myers ($2,052/18.16%), Tampa Bay ($2,029/17.08%), Sarasota ($2,402/16.98%), and Port St. Lucie ($2,201/15.61%) rounded out the top five.
“Florida is a popular destination under normal circumstances, and it’s even more desirable now because its pandemic policies strongly favored consumers and businesses,” FAU real estate economist Ken Johnson said. “Landlords can charge exorbitant rents because if the existing tenants do not accept the new lease terms, other people will accept them quickly. This all points back to a persistent inventory shortage in rental units.”
Other markets in Florida to crack the top 25 include Lakeland at No. 8, Daytona Beach at No. 12, Jacksonville at No. 13, Orlando at No. 16, and Melbourne at No. 19.
“It’s clear that rent increases have become a major problem across Florida, threatening the livelihoods of middle-class consumers,” Johnson added.
Researchers used past leasing data from Zillow to help compose the study earlier this year. FAU notes that while rent increases are likely to slow, the Miami market remains extremely hot.
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A condo project here in Jacksonville in San Pablo area had “homes starting at $300,000 the minute they began site development. then, in April the sign changed to “Starting at $400,000”! They are nothing special, just wood framing covered with Tyrek. I hope that they added a lot of foam insulation and used pressure treat lumber!