Locating a property to rent can be nerve-racking, even in traditional circumstances. But it is specifically frightening with rents skyrocketing to unparalleled heights. The past two years have modified the South Florida real estate market, creating havoc amid rising property prices — and there appears to be no end in sight.
The demand for livable properties has led rents to soar, escalating across the United States at a fast pace and making it excessively problematic for renters to find reasonably priced homes. In South Florida, coming out of the COVID-19 pandemic and amid an inflation surge, that has resulted in several families stuck in a rental crisis with little to no way out.
As per a recent study issued by the U.S. Census Bureau, since the coronavirus outbreak in 2020, statistics have shown excessive rental prices across the South Florida region inside a state with the highest burden by rent in the country.
The crisis of rents spiraling at high speeds lies within a numbers game. The majority of renters are fighting for a place to call home, and the inventory is simply not meeting the demand. The rental vacancy rate, in fact, depleted to 5.8% – the lowest it has been since the mid-1980s – according to new data published by the Joint Center for Housing Studies of Harvard University.
This is primarily affecting lower-income renters, as the housing shortage as well as unreasonable prices are making it difficult to find domains that fit within their budget. The top ten counties in the country that experienced the largest population surge were mainly in the southern states, and Florida often lands in that range anyway given its popularity amongst retirees.
May 2022 was the tenth continuous month that saw rent price multiplied in the double digits for 0-2 bedroom apartments – costing tenants nationally a standard 17.1% more than what they paid last year, according to a recent Realtor.com study. Home rents in the city of Miami have intensified more than 55% year-over-year since February – the highest yearly increase for any metropolitan area in the country. The numbers are staggering.
Gabriela Ortiz, 25, rents a three-bedroom apartment in Sweetwater, near Florida International University, where she will soon receive her Bachelor’s Degree in business administration by the end of the year.
Without her financial aid and working two full-time jobs, Ortiz said she wouldn’t be able to afford her $3,300-a-month apartment. As it is, Ortiz splits the cost with her two roommates and continues to work in hopes to have a place of her own.
“Miami is definitely a tough city to live in if you don’t hustle,” Ortiz said. “I just hope that one day all my hard work will pay off and I’ll be able to have my own place to call home.”
The overall rent for a typical 0-2 bedroom apartment in the city of Miami has doubled the estimated highest rent price for the average household. New data has shown the typical household income in Miami presently ranks as the least affordable city in the U.S., with the average tenant paying a staggering 59.5% of their monthly household income to pay rent.
According to the U.S. Federal Housing Department, they’ve categorized “affordable rent” as 30% of the household’s total income and anything more would be otherwise seen as unaffordable.
Jabib Musalan, a real estate agent for GRASP Realty in Miami, explained how he has never seen rental prices increase so dramatically as they have in the past two years, with properties renting over the listing price – and flying instantly.
For instance, Muslan stated how one apartment was recently listed on Zillow at $1,900 and was later rented at $2,500. Another tenant who was paying $1,800 had decided not to renew their lease, and the agency later rented out the apartment for $2,900 one week later.
“In a separate scenario, we listed a property for rent on Zillow late at night,” Musalan said. “One of our agents showed the unit at 9 a.m. the next day, and we had a contract written that same afternoon.”
Another factor adding to Miami’s growing rent prices is its characteristic as a renowned “international city” around the globe, Musalan added.
“Property owners are essentially attempting to recover from rents not rising as they typically would’ve since the start of the coronavirus pandemic,” Musalan said. “And with the extensive inflation trends nationwide, proprietors are also seeking compensation for higher costs in property taxes, interest rates, utilities and maintenance by passing those on to tenants to boost their profits.”
As the world reopens and people are more comfortable traveling, they are seeking to relocate where there are lower taxes and, not to mention, no longer having to worry about snow. Add into that a large wave of retirees and international renters, who are paying for their housing with wealth and not income, and Miami is even more of a hot spot than normal.
“When people have the ability to work remotely and are no longer tied to being in expensive cities such as [in] New York or California, they move down south,” Musalan said. “I guess the old saying ‘flying south for the winter’ brings on a whole new meaning in Miami’s current renters market.”