Florida’s Overburdening Rents Could Fall if NYC Residents Go Home
Calls for Northeast transplants to go back to their real offices should slow hefty rent increases in the Sunshine State.
In normal conditions, rents traditionally increase only 3 to 5 percent a year. If Floridians only had it that good. Signs of more moving vans on the road could make it happen.
A report this week from Florida Atlantic University—the Waller Weeks and Johnson Rental Index, which assesses the most overvalued US rental markets—showed that the top eight of 109 most overvalued markets are in Florida, where year-over-year rent jumps exceeded 21 percent.
It cost even more in the Fort Myers and Miami metropolitan areas where they are paying about 29 percent more in June than one year ago. That ranks them as the nation’s two most overvalued rental markets.
The research, however, suggests that improvement is on the way, with the expected pace of rent growth in those top eight markets to slow dramatically in the next year.
Factor NYC Workers’ Return to Office
Led perhaps by remote workers in Florida returning home in the coming months, the report forecast that rents in the New York metro area are poised to rise about 21 percent by June 2023.
“Many workers fled New York because of COVID-related restrictions and worked remotely from Florida, but now firms are requiring their employees to come back to the office,” said Ken H. Johnson, Ph.D., an economist in FAU’s College of Business and co-author of the index, in prepared remarks.
“Those COVID refugees placed a significant burden on the demand for rental units in Florida, and rents spiked to historic highs while New York became slightly more affordable. “With those workers returning home, Florida should see a cooling in its rent hikes, and New York renters will again have to deal with much higher rates.”
Their return also could calm recent cries for rent control in some Florida markets, according to the report.
The report showed that the lowest rent increase in June was in Jackson, Miss, at 5.8 percent more than a year ago.
Others with moderate increases were Wichita, Kan.; Des Moines, Iowa; and Youngstown, Ohio.