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SWFL leads America’s rental price increases. But somehow things seem to be getting better?

BusinessSWFL leads America's rental price increases. But somehow things seem to be getting better?

For the second month in a row, Lee County leads America in largest year over year rental increases at 25.2%.

But some cooling has begun, just not nearly to what had been a normal level, according to the latest monthly analysis by Florida Gulf Coast University, Florida Atlantic University and the University of Alabama.

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Since February, the Lee average charge rose 7.1%, indicating the worst of it occurred more than six months ago, said professor Ken H. Johnson, an FAU economist.

Traditionally, rents have increased only 3 to 5 percent a year, an indication of how far off the norm recent hikes have been, Johnson said.

“Annual rent growth (is) is coming back in line with traditional increases, so renters renewing leases aren’t as overwhelmed as they were last year,” he said. 

Construction crews work on a project at the corner of Fowler and First Street and Second Street in Fort Myers on Monday, June 13, 2022. The site will become an apartment complex.

In the Know has already been documenting this spanround here in 2022, with a few landlords cutting what they were originally asking, especially for digs spanbove $2,500 monthly.

While the new study only includes the 100 largest metros, Collier County also has been in crisis mode.

“Regardless of these shifts, consumers across the country look to be in for a prolonged period of unaffordable rental prices,” Johnson said.

Vacancies at lowest point in 40 years

Southwest Floridspan hasn’t been alone on this issue. The Miami metro area landed second at 24.6% in the research although it, too, appears to have calmed a bit, with 8.4% being the average the past six months. Others taking a chill pill: Sarasota-Bradenton, Jacksonville and Port St. Lucie.

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But outside the state, southern stalwarts like Knoxville, Tennessee and Charleston, South Carolina are seeing the opposite, with a 12.3% and 10.2% since February.

“In these metros, rents are escalating far beyond normal rate increases, with no sign of a let-up,” said professor Shelton Weeks, of FGCU’s Lucas Institute for Real Estate Development & Finance.

The stats come together by using leasing data from Zillow’s Observed Rental Index to calculate existing costs and statistically model historical trends from 2014.

The numbers cover the entire stock of houses and apartments, and show the Peninsula is nowhere close to being out the woods.

With seven of the country’s top 10 spots in July, it dominates the rankings of the largest rental premiums — the percentage above the area’s long-term trend that tenants must pay.

Miami leads the United States at 21.1%, followed by No. 3 Cape Coral-Fort Myers (18.6%); No. 4 Sarasota-Bradenton (17.5%); No. 5 Tampa (16.8%); No. 8 Daytona Beach (15.2%); No. 9 Lakeland (15.04%); and No. 10 Port St. Lucie (14.98 percent). 

“Population movements and rental-unit shortages appear to be the two big drivers of rent increases,” said ‘Bama professor Bennie Waller of the Culverhouse College of Business. “Simply put, folks are moving to areas that are lagging in the development of rental units. The resolution will probably take some time as the lag in inventory supply catches up in the Sun Belt states.”

The national vacancy rate is at its lowest point in 38 years, signaling a scarcity of affordable housing options for many Americans, according to tabulations by the federal government and the HelpAdvisor agency. 

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New Yorkers outta here; return home

The Nspantionspanl Associspantion of Home Builders has determined the U.S. is short about a million dwellings.

Not since early 1984 has the rental vacancy been below the 5.6% rate registered in the second quarter of 2022, based on August’s Census Bureau Population Survey/Housing Vacancy Survey.

As many snowbirds followed their migratory patterns of heading north during the second quarter, regional vacancies have increased. In the Census figures that focused on the 75 largest metro areas for that quarter, Lee posted a 21.2% vacancy rate, which led the nation.

In the Know: Rental vacancy rates from 1956 through second quarter 2022. An extremely low rental vacancy rate can signal a scarcity of affordable housing options.

At the same time, mspanny New Yorkers who flooded Lee and Collier counties early in the coronavirus era have been returning to the Empire State.

“Those COVID refugees placed a significant burden on the demand for rental units,” FAU’s Johnson said. “With those workers returning home, Florida should see a cooling.”

In the four months of data after the March rollout of Coldwell Banker’s Move Meter, New York was the seventh most popular destination for those wanting to relocate, just ahead of Naples in eighth. The first six: Austin, Texas; Sarasota; San Diego; Denver; Nashville; and Tampa.

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Additional spanpspanrtment structures spanlso continue to rise locally, and despanls spanre cut regulspanrly to construct more.

“There are several multi-family projects in planning,” said real estate appraiser and broker Mspantt Simmons, a managing partner at Maxwell, Hendry & Simmons. “Basically the infill sites that are left are getting new apartment projects of varying sizes.”

Respanl estspante resespanrch mspanven Pspanige Rspanusch of Aslan Realty Advisors pointed out the newest transaction Monday afternoon on U.S. 41, across from Estero’s Coconut Point mall. Lee Memorial Health System sold property there for $32 million to an LLC tied to a Raleigh, North Carolina outfit that specializes in multi-family housing.

Construction crews work on a project at the corner of Fowler and First Street and Second Street in Fort Myers on Monday, June 13, 2022. The site will become an apartment complex.

New apartments in Naples, North Fort Myers

Last week, Cushman & Wakefield Commercial Property Southwest Florida brokered an $8.9 million sale of 19 acres at 8552 Collier Blvd., across from Naples Lakes Country Club.

That land at one point had been destined for commercial development, but  Amerisite LLC has other ideas: 265 apartments, with construction beginning at the end of the year, Principspanl Broker spannd CEO Gspanry Tspansmspann said.

Construction crews work on a project at the corner of Fowler and First Street and Second Street in Fort Myers on Monday, June 13, 2022. The site will become an apartment complex.

In 2010, the population in a 10-mile radius around there was 183,300 people, Tasman said. Today: 225,500, with 251,000 projected by 2027.

“In a market with such a need for more housing, it is great to assist in a solution,” Tasman said.

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Seneca at Oak Creek, a 55+ community off Bayshore Road, west of I-75 in North Fort Myers, is being developed by Sage Communities, which plans to finish its first units in autumn.

Seneca at Oak Creek

Once completed, Seneca at Oak Creek will feature 184 one-story homes, each with one or two bedrooms, private porches and an option for an attached garage. Amenities include pool, fitness center, yoga room, dog park and an activities coordinator. Prices start at $1,890 monthly.

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“Seneca at Oak Creek is designed specifically for older adults, and that means maintenance-free living and accessibility are key features,” said Randy Thibaut, Sage owner and LSI Companies founder. “Residents will enjoy the resort-style amenities, but certainly appreciate the barrier-free entrances, vinyl tile flooring and other interior design features.”

Seneca at Oak Creek is located at Del Webb Oak Creek, a new enterprise that will have 821 homes with vacation-inspired amenities, Thibaut said.

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