Florida Apartment Rents Doubly Overvalued Compared to National Average

Florida is the most overpriced apartment market in the country, perhaps even twice as much as the national average, according to a report this week from Florida Atlantic University and two other schools.

While the US rental “crisis” appears to be softening, according to the report, Florida rents remain expensive.

Miami leads the US with renters spending 18.22 percent more than they should, based on past leasing price history. Five other Florida markets are among the top 10 in most overpriced rental premiums: Cape Coral-Fort Myers, Tampa, North Port-Bradenton, Orlando and Deltona-Daytona Beach.

Nationally, the average rental premium at the end of September was 9.33 percent.

Strong Demand, Shortage of Units

Ken H. Johnson, Ph.D., an economist in FAU’s College of Business, said in prepared remarks, “I’m not surprised to see Florida still at the head of the pack, given the strong demand and severe shortage of units.”

When it comes to the largest annual increases, Miami again tops the list at 18.81 percent. Four other Florida markets rank in the top 10: Cape Coral-Fort Myers, Deltona-Daytona Beach, Orlando and Palm Bay-Melbourne. In typical markets, rents increase only 3 to 5 percent a year.

Bennie Waller, Ph.D., of The University of Alabama’s Culverhouse College of Business, said he’s encouraged by the national trends.

“No one can say the rental crisis is over just yet, but it isn’t getting worse, at least in some areas,” Waller said in prepared remarks.

“For example, the most recent average rent increase in Birmingham, Alabama was 8.36 percent, but four months ago the increase was 10.99 percent. So, it’s moving in the right direction.”