Miami-Dade’s home rental market ‘most competitive’ in U.S., new report says
Talk about fierce competition for homes. A new report called Miami-Dade County the most “competitive” residential-rental market in the United States in 2022, another reminder of the lingering housing crisis plaguing the community.
Renters found it extremely difficult to find a place to live in the Miami metropolitan area compared to anywhere else in the country, according to RentCafe’s annual market insights report. The Miami area had on average 32 prospective renters vying for each available apartment, while 75% of apartment dwellers stayed put last year and renewed their leases. That compares to a national average of 14 prospects competing for each rental and 63% of tenants renewing leases last year.
The most popular areas to rent in Miami-Dade were Coral Gables, Coconut Grove and Hialeah. By the end of the year, 97.5% of all available apartments were occupied.
What’s the lure of Miami? Leading the combination of factors were no state or local income tax in Florida, the business-friendly climate and burgeoning technology scene. Those things, according to the report, attracted droves of millennials, born in the early 1980s, and Gen Zers, born between 1996 and early 2000s, looking to work and live in the Sunshine State. According to RentCafe, the average monthly rent for an apartment in Miami is $2,356 and the average size is 888 square feet.
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In Florida, Orlando, Southwest Florida (Sarasota, Fort Myers, Bradenton, Naples, Port Charlotte, Venice and Cape Coral), Broward County and Tampa also made the top 20 most competitive places to rent a home, ranking third, No. 11, No. 14 and No. 17, respectively.
Yardi Matrix, the parent company of RentCafe, surveyed renters across the country in 135 metro areas from April 2022 through December 2022. RentCafe studied multifamily buildings with over 50 apartments, condominiums for rent and single-family homes.
Rounding out the five hottest rental areas outside of Miami and Orlando were Grand Rapids, Michigan, second, Harrisburg, Pennsylvania, fourth, and fifth North Jersey, particularly Jersey City and Newark, N.J.
Blame the ultra-stiff competition for housing in Miami on the wealth boom and lack of supply of homes, said Ken H. Johnson, a finance professor specializing in real estate at Florida Atlantic University.
“We’re going to talk about an affordable housing crisis for years to come,” Johnson said. “The rent crisis and the home prices down here are our biggest threat to the economic expansion that’s been going on in Florida. It is scary. We might not reach our economic potential, because we developed a housing market that’s really unaffordable for the service workers, teachers, firemen. We just don’t have support workers and that’s hurting this part of the state.”
Digital nomads have moved to Miami en masse during the ongoing pandemic that began in March 2020. Given the chance to work anywhere during the work-from-home trend, many chose to do so in a region with lax COVID-19 restrictions and a warm climate. Many tech, finance and legal executives simultaneously expanded their offices and invited their employees down to South Florida. The migration — primarily from the Northeast and many people earning high salaries — raised competition for slim housing supply.
Miami and South Florida’s wealth migration started slowing in late 2022. That’s expected to keep asking rents and competition for apartments flat in the coming months of the new year. According to the U.S. Census Bureau, Florida welcomed the most new residents — 220,890 people between 2020 and 2021 — than any other state.
Doug Ressler, Yardi Matrix manager of business intelligence, said his firm predicts 10,000 new rental homes will be built in Miami-Dade every year for the next three years. However, demand is expected to remain steady as still more newcomers arrive.
“One of the nice things about Miami is that the ports are expanding,” Ressler said. “That’s going to bring in more people.”
This story was originally published January 6, 2023 at 5:30 AM.
