In Florida’s most populous cities, rent prices are going down
- Last month, asking rents in Jacksonville dropped a record 12% year over year. They also went down in Tampa, Orlando, and Miami. Austin, Texas also had a record drop.
- A lot of apartments were built in Florida and Texas to meet the high demand during the pandemic. Now, property owners are lowering their prices to get new renters.
- In June, the median asking rent across the country went up about 1%, reaching its highest amount since 2022.
In June, the average rent for an apartment in the United States increased by 0.7% annually to $1,654. That was the highest median price since October 2022 and the largest growth in more than a year.
Florida is defying the US norm. The four most populated metro regions in the Sunshine State are experiencing a decrease in rent prices. June had the largest annual decline in Jacksonville’s median asking rent since statistics from 2019 began to be kept.
The decline was 12.4% year over year. Tampa experienced the biggest decline ever, at 6%. Rent prices decreased by 3.8% and 4.8%, respectively, in Miami and Orlando.
The Biggest Metro Areas in Florida Are Seeing Declining Rents
Change in the median apartment rent request year over year
Austin, Texas, is seeing a sharp decline in rent. The greatest loss among the 33 metro areas for which Redfin has rent-price data was seen in June, when the median asking rent in the Texas capital dropped a record 12.6% from a year earlier.
During the pandemic moving frenzy, Florida and Texas both constructed a large number of apartments to match the surge in demand. Now, many property owners are decreasing rents to attract tenants.
According to a different Redfin estimate, in 2021–2023, Austin issued more multifamily development permits per 10,000 residents than any other city in the nation. Jacksonville came in third. Even while building has slowed down in many areas of Florida and Texas, as well as the entire nation, the greatest building permitters remain the metro areas in both states.
If you’re a renter in Florida or Austin, now is an excellent time to look for deals, according to Redfin Senior Economist Sheharyar Bokhari. Renters can be eligible for benefits like free parking or lowered rent because there is such a glut of available rental properties.
However, Florida renters should be aware that landlords are having financial difficulties due to rising property insurance premiums, and they may eventually ask occupants to pay more in rent to cover the costs.
These neighborhoods may be experiencing a decline in rent because they overheated during the epidemic, driving out a large number of residents, and are now cooling off. For instance, in Tampa, rent increases in 2022 reached a rate of 37.8% year over year, which at the time was more than twice the national average.
The tough housing market is driving up rental demand, but rising inventory is restraining price growth. Nationally, rent prices are slowly rising
As previously stated, June saw the highest rent levels since 2022. Rent costs are rising due to demand from young tenants, many of whom are choosing to stay renters rather than deal with an increasingly expensive housing market.
However, because there are still a lot of new units coming on the market to satisfy that demand, price increase has been restrained thus far. Landlords usually have little room to raise rent during periods of increased supply since they are trying to fill available units.
Due to the large number of construction projects that were started during the pandemic but are only now being completed, apartment builders have put a brake on the number of projects they are starting. Multifamily building starts have fallen below their 10-year historical average. Despite this, completions are still close to their record high.
Consequently, the rate of vacancy for newly constructed apartments in U.S. buildings with five or more units is 7.8%, a modest increase from 7.4% at the beginning of 2023 and 7% at the beginning of 2022. Newly constructed apartments are filling up at the slowest rate since 2020.
Cincinnati and Virginia Beach Have Seen More Than 12% Increases in Rent
The largest increase among the 33 metro areas Redfin examined was seen in June, when the median apartment asking rent in Virginia Beach, Virginia, increased 12.9% year over year. Cincinnati (12.2%), Baltimore (10.7%), Chicago (11.3%), and Washington, D.C. (11.9%) followed.
Due to the fact that fewer apartments have been constructed in the Midwest and Northeast than in the Sun Belt, rent prices are increasing in many of these metro areas. In addition, the Midwest has the lowest cost of living, which supports demand during a period when much of the country is experiencing difficulties with housing affordability.
Austin (-12.6%), Jacksonville (-12.4%), San Diego (-11.4%), San Francisco (-6.1%), and Tampa (-6%) had the largest drops in asking rent.
Techniques
The newly listed apartments in apartment complexes with five or more units are included in the median asking rent data in this study. The median asking rent for June 2024 includes rentals that were listed on Rent.com and Redfin.com over the three months ending June 30, 2024. This is because the median is determined using a rolling three-month timeframe.
This report includes metro-level data for 33 of the 50 most populous core-based statistical areas (CBSAs) in the United States that Rent. and Redfin have adequate rental data for. Data for the entire United States is the basis for the national figures.
The current costs of new leases during each time period are reflected in the asking rentals. Put another way, the sum displayed as the median asking rent represents the median asking price of units that were open to new tenants during the report period, not the median amount that all tenants pay.