Florida rent hikes were "on another level" last year. Increases continue with no end in sight

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A staggering 37% increase in Palm Beach County rents last year floored even seasoned analysts who noted in one annual report that, while 2021 apartment price hikes were dramatic nationwide, “Florida was on another level.”

The catapulting rent costs, which included spikes of 40% in Delray Beach and 39% in Boca Raton, was buoyed by a second year of deep-pocketed pandemic migrants willing to pay northeast coin for Sunshine State digs.

“Florida over 2021 had the most rent growth of any state or general area in the country,” said Jeff Andrews, data analyst for the rental listing platform Zumper. “And I don’t think it was even very close.”

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In its 2021 rent report, Zumper – Zillow for apartments – said five of the top 10 highest rent increases in the country’s most populated cities were in Florida. Zumper ranked Miami in the top spot with a 38.2% increase followed by Tampa’s 38.1%. Orlando was third with a 32.8% jump.

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Moving from New York to Florida

The breakneck ascent in prices came at the same time that driver’s license records show 8,100 people traded New York IDs for those with Palm Beach County addresses – 37% higher than the average for 2017-2021.

That's a Big Apple boost larger than what both Miami-Dade and Broward counties experienced, and higher than any year back to at least 2016. Statewide, 61,730 New York IDs were exchanged for ones from the Sunshine State. That’s 34% higher than the 5-year average.

Palm Beach County gained 4,088 new residents from New Jersey in 2021, according to the driver’s license data. That was 32% higher than the 5-year-average. About 32,100 New Jersey licenses were traded for Florida IDs statewide.

“It’s a bit of a meme that New Yorkers are moving to Florida and Californians are moving to Arizona, but it’s rooted in reality,” said Rob Warnock, senior research associate for Apartment List.

In West Palm Beach, rents skyrocketed 36.7% in 2021 with the median price of a one-bedroom landing at about $1,700 last month. A two-bedroom was fetching a median of $2,060, according to Apartment List.

Statewide, the increase in 2021 rents was about 30% over 2020. That’s compared to an annual pre-COVID increase of just 3.7% in 2018.

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Although Florida rents are on fire, a one-bedroom in Miami for $2,280 is still a steal compared to New York City's median price in December of about $3,190. That means newcomers may see Florida's market as bargain-basement, whereas current residents see prices they can no longer afford, Warnock said.

When Paul Bonharmann listed his one-bedroom garage apartment in West Palm Beach for $1,600 a month, he got 37 inquiries in an hour.

“I took the ad down,” Bonharmann said. “Within a day, 15 people wanted to sign a lease and three people offered $200 more than what I was asking.”

In the end, he increased the rent to $1,800 and extended the lease for another year to the tenant who was living in the unit.

“After she signed it, she said, ‘To be honest, I was willing to pay $500 a week,’ ” Bonharmann said.

And while many transplants are buying homes or condos, a lack of inventory puts a pinch on rentals, with bidding wars pushing buyers with less capital into the rental market.

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“When buyers are looking for six or seven months and hitting a wall, they may decide to rent for another year,” said Carlos Melendez, president of Broward, Palm Beaches and St. Lucie Realtors. “But then landlords are getting 30 rental offers on each unit.”

Analysts at Zumper and Apartment List said they don’t expect rents to decrease this year, although price increases may moderate with an influx of inventory coming to South Florida in the next few years.

The apartment vacancy rate in Palm Beach County in December 2020 was 6%. That bottomed out at 2.5% in October 2021 but rebounded in December to 3%, according to Apartment List. If the vacancy rate continues to increase, Warnock said rent prices may slow their meteoric rise, but no backslide is predicted.

That’s not good news for Anna Anzelmo, who will be looking for a rental in the coming year with a budget of about $1,000 per month to spend. The 58-year-old lives with her daughter currently in a 1,500-square-foot house near Palm Beach International Airport that costs $2,300 a month.

“Anything more than $1,000, I would have to get a roommate, and I’m not crazy about that idea,” Anzelmo said. “I’m fine without a lot of amenities.”

Anzelmo said she may explore rental options in Century Village, an age-restricted community that typically has lower-than-average rents.

Indiana resident Rose Heimann started searching to buy a home in Palm Beach County last year so she could be closer to a business she started in Haiti recycling used water bags to make totes, wallets and purses.

She said she could sell her home in Indiana for top dollar but only buy a “postage stamp” in Florida. Her rental search did little better with age 55-plus communities also popping up in searches when she considered her budget. Heimann is 40 years old.

“Many places, even small studios and such, were still very costly,” Heimann said. “I haven’t given up on housing in Florida, but I did decide to take a little break and see if some time will allow the market to relax a bit.”

Kmiller@pbpost.com

@Kmillerweather

Nine of the top 10 counties nationwide ranked for highest annual rent increases in 2021 are in Florida.

Location 2021 rent growth

Collier County 51.1%

Manatee County 43.7%

Sarasota County 43.4%

St. Lucie County 43%

Lee County 37.9%

Palm Beach County 36.7%

New York County 33%

Hillsborough County 32.9%

Okaloosa County 31.7%

Pinellas County 31.6%

Source: Apartment List

Rent growth for nation, state and Palm Beach County for 2019-2021

Location 2019 2020 2021

National 2.3% -1.6% 17.8%

Florida 1.5% 0.1% 30.4%

PBC 2.5% 1.8% 36.7%

Source: Apartment List

Rent growth as of Dec. 2021:

Location Since March 2020 Median 1 BD Median 2 BD

Boca Raton 37.5% $2,324 $2,669

Delray Beach 39.2% $2,004 $2,539

Boynton Beach 36.7% $2,136 $2,466

West PB 39.9% $1,689 $2,059

Source: Apartment List

This article originally appeared on Palm Beach Post: Florida rents exploded in 2021 as pandemic migrants flooded state