SOUTH FLORIDA REAL ESTATE
Rental market on upswing in South Florida
As foreclosures and falling home values continue to slam the local housing market, the forecast for rentals is improving
tolorunnipa@MiamiHerald.com
In the three years since Dan Cordtz moved to his one-bedroom apartment above Mary Brickell Village, a slew of restaurants have opened up, young professionals have swarmed the area and a New York-style street market has livened up South Miami Avenue on Sundays.
But the neighborhood's blossoming has come with a price tag: As Cordtz's lease at Camden Brickell was about to expire last month, he got a letter from his landlord saying his rent would be increased by 29 percent, or $358 each month, when he renewed.
``It struck me as being odd, given what I know about the market in Miami, that they would feel free to impose these increases,'' the 83-year-old native New Yorker said.
In a housing supply-demand tug of war being pushed and pulled by falling home values, hard-to-come-by credit and a foreclosure tsunami, rentals could be the only upward trend in South Florida's battered housing market this year.
Rising rents are unwelcome news for the everyday consumer, already struggling with stagnant wages and a turbulent job market, but some economists believe they foreshadow a tail end to the housing crisis.
A collection of recent research portrays a rental market that is likely to improve this year, even as most other housing measures -- foreclosures, home values, new construction -- are forecast to worsen.
``Significant increases in rents at upper-class properties will raise market wide rental rates modestly,'' a fourth-quarter market report from real estate firm Marcus & Millichap said. ``In the [high-end] segment, vacancy has fallen [in 2010], and operators continue to leverage modest improvements in renter demand in several submarkets to raise rents.''
According to that report and others published recently, South Florida's rental occupancy rate is nearly 95 percent, and that number is expected to continue to increase as the economy improves. Rental rates, which fell significantly during the housing crisis, are expected to increase 2.3 percent this year in Miami-Dade County and about 5 percent in Broward.
``When the economy got to its worst point, a lot of younger renters ended up either doubling up or moving back home, and that took a lot of renters out of the market,'' said Kirk Felici, vice president and regional manager at Marcus & Millichap's Miami office. ``Now as the economy starts to [improve], we're seeing some of those renters come back.''
As failed condo projects turned to renters for relief, young professionals flooded submarkets like Brickell and downtown Miami, where leasing activity is up about 11.5 percent in the last year, according to a study by the city's Downtown Development Association. Across Miami-Dade, occupancy was up slightly in 2010, with rent prices increasing about 2 percent to an average of $990, according to the Marcus & Millichap report.
Based on highest rent prices and occupancy rates, the healthiest market continues to be Miami Beach, where the average unit rents for $1,367. The occupancy rate there is about 96 percent.
In Broward, rent prices are forecast to increase 5 percent as occupancy rises 1.6 percent this year, according to Texas-based MPF Research.
Cities like Coral Springs and Hollywood saw prices increase last year, and analysts predict they will lead the way in Broward's rising rental market this year.
Rising rent prices are generally regarded as a sign of an improving economy, but for renters who have gotten used to special deals from landlords desperate to fill units, they can be a nuisance.
This article was pusblished in the Miami Herald on January 17, 2011.
JCG Property Management is a Fort Lauderdale property management company that offers services with rentals, sales and purchases. Janice Gomez is a licensed Realtor with Coldwell Banker Residential Real Estate located at 910 SE 17th Street in Fort Lauderdale. For additional information please visit my website at http://www.fortlauderdalepropertymanagement.com/
But the neighborhood's blossoming has come with a price tag: As Cordtz's lease at Camden Brickell was about to expire last month, he got a letter from his landlord saying his rent would be increased by 29 percent, or $358 each month, when he renewed.
``It struck me as being odd, given what I know about the market in Miami, that they would feel free to impose these increases,'' the 83-year-old native New Yorker said.
In a housing supply-demand tug of war being pushed and pulled by falling home values, hard-to-come-by credit and a foreclosure tsunami, rentals could be the only upward trend in South Florida's battered housing market this year.
Rising rents are unwelcome news for the everyday consumer, already struggling with stagnant wages and a turbulent job market, but some economists believe they foreshadow a tail end to the housing crisis.
A collection of recent research portrays a rental market that is likely to improve this year, even as most other housing measures -- foreclosures, home values, new construction -- are forecast to worsen.
``Significant increases in rents at upper-class properties will raise market wide rental rates modestly,'' a fourth-quarter market report from real estate firm Marcus & Millichap said. ``In the [high-end] segment, vacancy has fallen [in 2010], and operators continue to leverage modest improvements in renter demand in several submarkets to raise rents.''
According to that report and others published recently, South Florida's rental occupancy rate is nearly 95 percent, and that number is expected to continue to increase as the economy improves. Rental rates, which fell significantly during the housing crisis, are expected to increase 2.3 percent this year in Miami-Dade County and about 5 percent in Broward.
``When the economy got to its worst point, a lot of younger renters ended up either doubling up or moving back home, and that took a lot of renters out of the market,'' said Kirk Felici, vice president and regional manager at Marcus & Millichap's Miami office. ``Now as the economy starts to [improve], we're seeing some of those renters come back.''
As failed condo projects turned to renters for relief, young professionals flooded submarkets like Brickell and downtown Miami, where leasing activity is up about 11.5 percent in the last year, according to a study by the city's Downtown Development Association. Across Miami-Dade, occupancy was up slightly in 2010, with rent prices increasing about 2 percent to an average of $990, according to the Marcus & Millichap report.
Based on highest rent prices and occupancy rates, the healthiest market continues to be Miami Beach, where the average unit rents for $1,367. The occupancy rate there is about 96 percent.
In Broward, rent prices are forecast to increase 5 percent as occupancy rises 1.6 percent this year, according to Texas-based MPF Research.
Cities like Coral Springs and Hollywood saw prices increase last year, and analysts predict they will lead the way in Broward's rising rental market this year.
Rising rent prices are generally regarded as a sign of an improving economy, but for renters who have gotten used to special deals from landlords desperate to fill units, they can be a nuisance.
This article was pusblished in the Miami Herald on January 17, 2011.
JCG Property Management is a Fort Lauderdale property management company that offers services with rentals, sales and purchases. Janice Gomez is a licensed Realtor with Coldwell Banker Residential Real Estate located at 910 SE 17th Street in Fort Lauderdale. For additional information please visit my website at http://www.fortlauderdalepropertymanagement.com/
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