Tampa is ranked No. 3, behind Miami and Fort Myers
TAMPA, Fla. (WFLA) — In a ranking by the Florida Atlantic University Real Estate Initiative, an analysis of rental data from Zillow was used to rank metro areas that are more overvalued or cost more than they should.
Of the 25 most expensive markets, 10 were in Florida. Tampa was ranked No. 3, just behind Miami and Fort Myers. The top five cities were all in Florida.
Two of the cities are in the Tampa Bay area, Tampa-St. Petersburg-Clearwater and North Port-Sarasota-Bradenton metros. Lakeland was not far behind at No. 8.
|Rank||City/Market||Average rental price||what it should be||Prime %|
|1||Miami-Fort Lauderdale, Florida||$2,832.00||$2,325.99||21.75%|
|2||Fort Myers, Florida||$2,052.00||$1,736.68||18.16%|
|4||North Port-Sarasota-Bradenton, Florida||$2,402.00||$2,053.40||16.98%|
|5||Port St. Lucie, Florida||$2,201.00||$1,903.88||15.61%|
Ranked cities and markets have been listed with a premium, or percentage of what the price should be. FAU said the price “should be” was reported based on “past rental data from Zillow’s Observed Rent Index” and historical rent data over time. Then it was compared to the modeled prices of what the expected prices would be, compared to the current actual prices.
In addition to Miami, Fort Myers, Tampa, Sarasota and Port St. Lucie, the top 25 also had Lakeland, Daytona Beach, Jacksonville, Orlando and Melbourne as Florida cities in the list. Melbourne had the lowest tier premium on rental costs of Florida cities, at 12.45%.
With the exception of Port St. Lucie, all of the cities listed were also ranked in the FAU’s Beracha and Johnson Housing Market Index of overvalued home purchase prices.
“Florida is a popular destination under normal circumstances, and that’s even more desirable now because its pandemic policies have heavily favored consumers and businesses,” Ken said. H. Johnson, Ph.D., an economist at FAU’s College of Business, said in a statement accompanying the rent analysis. “Landlords can charge exorbitant rents because if existing tenants don’t accept the new lease terms, other people will quickly accept them. All of this points to a continuing shortage of inventory in rental units.
Johnson and his partners at the University of Alabama and Florida Gulf Coast University said the increase in rents was partly due to “high demand for out-of-state transplants” and a continuing problem of developers “struggling” to build more housing. The automaker’s slowdown is due to “shortages in the supply chain and rising material costs.”
As inflation continued to rise in the United States and around the world, amid shortages and supply chain complications, mortgage lending rose with the Federal Reserve raising interest rates.
“Recent rent increases are unusual because rents tend to be less volatile than house prices, which are more responsive to external forces, such as changes in mortgage rates, the researchers said,” the statement said.
The cost of rent is always on the rise. Miami remains the most expensive place to rent in Florida’s “big cities,” according to ApartmentList. A one-bedroom apartment in Miami has a median rental cost of $1,656, while the same report shows a two-bedroom apartment costs up to $2,163 per month. Rental prices in Miami have reportedly increased for 17 consecutive months, with not a single reported decline since November 2020.
“Tampa rents are up 0.6% over the past month and are up a whopping 27.6% from the same time last year. Currently, median rents in Tampa are $1,484 for a one-bedroom apartment and $1,810 for a two-bedroom apartment,” according to ApartmentList. “This is the fourth straight month the city has seen a rise in rents after a decline in December of last year. Tampa’s year-over-year rent growth is below the state average 28.0%, but exceeds the national average of 16.3%.
Compared to the rest of the United States, rents are much higher in Tampa. Nationally, rent is up just 16.3%, and the average two-bedroom rent is $1,319, compared to $1,810 in Tampa.