Average residential rents in South Florida were up 35.8% year over year, the highest for any U.S. metropolitan area, according to a report from Redfin.
The report, released Nov. 23, stated average monthly rents nationwide increased 12.5%, to $1,895, in October. The average monthly rent in South Florida was $2,891 in October.
Just behind South Florida is the Seattle metro area, where residents saw rents increase 32.3%, to $3,012 a month. In third place is the Jacksonville metro area, with a 31.6% increase to $1,621 a month. Residents of the New York metro area saw a 30.9% increase, to $3,665 a month.
This trend has motivated developers to build more top-of-the-line Class A apartment buildings that command higher rents. The Class B and Class C apartments that remain are being pounced on by investors. As a result. Class C apartments average $150,000 a unit throughout South Florida for the first time, according to a recent report from Franklin Street.
But in the long term, this trend will be economically detrimental in a region that is already considered among the least affordable for renters, warned Edward “Ned” Murray, associate director of the Jorge M. Pérez Metropolitan Center at Florida International University.
“The real impacts on the economy is because, obviously, workers can’t afford to live here and they will move on, as we believe they already are, particularly in Miami-Dade,” he said.
Adam Tiktin, managing director of mixed-use, office and retail for commercial brokerage Franklin Street said, “Investors are getting very aggressive, mostly because the interest rates are so low, but there’s [also] more capital out there than I have ever seen.”