Engineer Matt Swanson was working in the home office of his Baldwin Park apartment a few days ago when his wife, Katelynn, came in crying.
“She was hard sobbing, couldn’t catch her breath,” Swanson said. “I asked ... ‘Did someone die?’”
It wasn’t that. Instead, the Swansons had received the renewal notice from their landlord. The monthly rent on their two-bedroom was going up by $703, from $1,747 to $2,450 — a 40% increase.
“We are essentially facing financial eviction,” said Swanson, 29.
Such sticker shock is common for Orlando renters as skyrocketing demand pushes rents to new heights, a situation experts say isn’t likely to end anytime soon.
“I wish I could tell you that we’re going to have some moderation in rents. I just don’t see it,” said Jonas Bordo, CEO of apartment listing website Dwellsy. “I think we’re going to see more aggressive price increases.”
The median asking rent in metro Orlando in March was $2,295, according to Dwellsy, a 57% increase year-over-year. Orlando ranked No. 8 on cities with the highest increase in the nation.
Tampa with a 56% increase and Jacksonville with 53% were the only other Florida cities to make the top 10. Tuscon, Arizona, took the top spot with a 139% increase.
Swanson said his rent at Azul Baldwin Park went up by $100 last year, and he had expected something similar this year. But, he added, “a hundred in a normal year would feel like a lot.”
Azul Baldwin Park did not return a request for comment.
Swanson was given 30 days to agree to the new lease. He says the search for a more reasonably priced apartment has been frustrating. “There’s not a lot of availability,” he said. “The ones that are available are the most expensive models.”
Metro Orlando has only a 5.2% vacancy rate, according to data analysts CoStar.
Swanson says he has all but given up on finding a new apartment.
“Our approach now is to find as affordable of a rental house as we can, even if we have to make some concessions about quality or location,” he said.
But that might be difficult for him, too. Rental homes have seen demand sharply increase since the pandemic, Bordo said. The median asking rent for a single-family home was $2,400 per month in March, compared with $1,681 for apartments, according to Dwellsy.
“By far, that’s the type of home everyone wants right now,” Bordo said. “Everybody wants a little more space.”
More than 95% of single-family rentals are owned by small investors who may only own a couple of properties, making it a difficult market to track.
Bordo said one possible stabilizing factor in rents might come from the rise of institutional single-family rental investors, such as American Homes 4 Rent, which built the Crestridge at Leesburg, a rental home community.
Only about 3% of the market is held by such institutional investors, a number that is growing rapidly, especially in mid-sized cities such as Orlando.
“Those middle-expense markets tend to be where they have put the most focus,” Bordo said. “They should, in the long run, reduce prices by producing more stable inventory.”
However, Bordo acknowledges that the presence of these new players is also putting added pressure on the housing market, which moves prices higher. “[Since] there’s an additional source of demand on homes, that’s going to raise prices,” he said.
Much of the rise in rents is a reflection of the housing market, which in Orlando has seen inventory set new record lows four times in the past year. “That’s creating a short supply situation while demand is going through the roof,” Bordo said.
The Swansons both have graduate degrees. Katelynn works as a personal trainer and Matt has been making six figures for two years. They were planning on saving another year to buy a house and start a family.
Instead, “it feels like someone is digging the ground out from under me,” Matt Swanson said.
“It’s easy to say ‘Oh, man, housing is nuts right now,’ and think nothing else about it,” he said in an email, “but when confronted with the reality of $700 more a month for the exact same apartment the gravity of what these companies are doing really lands.”