A continuing wave of high apartment supply volumes is causing rents to fall sharply in most Florida markets, with effective rents plummeting between 2% and 8% for the year ending in the second quarter across most of the state.
The deepest declines were in Naples and Cape Coral, where prices fell 7.5% and 6.6% respectively, on the impact of supply pressure and normalizing migration trends, according to a RealPage analysis. Crestview and North Port saw decreases of 4% to 5%, and larger markets like Jacksonville and Orlando took a fall of 2.5% in the year-ending second quarter.
More modest rent drops of less than 2% were observed in Lakeland, Deltona, West Palm Beach, Fort Lauderdale, Palm Bay and Pensacola. Some Florida markets saw rent growth, including Tampa, Gainesville and Miami, although growth was below the national average of 0.8% in those markets. The only two markets that posted rent growth ahead of the U.S. average were Tallahassee at 2.7% and Port St. Lucie at 4.1%.
The impact of elevated supply on rent growth is unmistakable across the state, as only three markets had inventory growth below the national average during the second quarter. Those markets are Tallahassee, Gainesville and West Palm Beach.
“For the most part, the Florida markets with the deepest rent cuts are also the ones seeing the biggest inventory increases,” said RealPage. “New supply volumes in Cape Coral, North Port, Lakeland and Jacksonville are clearly a big force behind the state’s slowdown in rent positioning.”
Inventory in Jacksonville, Deltona, Palm Bay, Crestview, North Port, Cape Coral and Lakeland is between two and four times the 2.7% pace of the national average, which is coming down from a record peak, said the report.
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