Miami Ranks Seventh in Housing Shortage Report As Florida Sees Nations Highest Rent Increase Since 2020
New research has shown that Miami ranks seventh in housing shortage report as Florida has seen the highest rent increase in the nation since 2020. Prices have continued to push higher where rental rates a 2 bedroom rental on Miami Beach is up over 46% year-over-year as of June 2023. Developers have struggled to keep pace despite Miami-developers leading the nation with a record 28,000 units currently under development in the Miami metro-area according to a Costar report.
New research has revealed the top 10 metropolitan areas with the highest ratio of house shortages in accordance with job growth. Miami, FL, is facing a significant challenge in its housing market, as indicated by its job growth-to-building permits ratio of 20.2.
The other US metropolitan areas experiencing housing shortages include San Francisco, Springfield, Urban Honolulu, Syracuse, Boston, New York City, Chicago, New Haven, and Los Angeles.
Real estate site PortlandRealEstate.com analyzed data from the National Association of Realtors, US Census Bureau, and the Bureau of Labor Statistics, examining new job openings per one building permit to determine the housing shortages in metropolitan areas in 2022.
Job Growth-to-Building Permits Ratio: 1. New York City, NY (31.4); 2. San Francisco, CA (29.2); 3. Springfield, MA (26.6); 4. Urban Honolulu, HI (25.1); 5. Syracuse, NY (21.8); 6. Boston, MA (20.4); 7. Miami, FL (20.2); 8. Chicago, IL (19.5); 9. New Haven, CT (19.3); 10. Los Angeles, CA (18.3)
The job growth-to-building permits ratio represents the relationship between new job opportunities created and new building permits issued. Specifically, it indicates the number of new jobs generated for every building permit issued. For example, a ratio of 30 means that, on average, approximately 30 new jobs were created for each new building permit issued. For reference, the average job growth-to-building permits ratio for cities included in the study was 7.64.
Miami, FL, faces a housing shortage as reflected by its job growth-to-building permits ratio of 20.2. The ratio suggests that the job market in the area is experiencing growth, potentially outpacing the construction of new housing units. As a result, the limited housing supply leads to increased housing costs and affordability challenges for residents.
“Miami is seeing rapid job growth as companies and employers move to the city for its pro-business environment and high-quality of life. This has led to a higher housing shortage than most other metro-areas as developers have struggled to keep up, leading to high-prices and rapid rent growth. Units in Downtown Miami and Brickell that would have rented for $2,000 or $3,000 a few years ago are now renting for potentially $5,000+. The residents moving out have not yet found comparable replacements yet more people are moving to the city so developers are pushing to keep pace as pricing pushes higher on average.” Said Demetri Demascus, Co-Founder of PROFILEmiami, Managing Broker of ALTARA Properties and developer of Casa Azzura townhomes in Coconut Grove.
A 1 Bed / 1.5 Bath unit at Ten Museum Park in Downtown Miami which recently leased for $2,900
Due to the demand for business to move to the Sunshine State, Florida rent prices are up by 45.77% since 2020, the highest in the nation according to a study by Los Angeles-based luxury real estate experts Los Feliz. Florida and Colorado have seen rent prices increase by over 45% since 2020. With 34.2% of the U.S population renting their home, luxury real estate experts at Los Feliz analyzed the average rental price in each state in March 2020 and again in March 2023 to calculate the percentage increase by comparing average rental price in each state in March 2020 and again in March 2023 to calculate the percentage increase. 34.2% of the U.S population rents their home.
The findings show that Florida’s average rent has increased to $2,127.86 in 2023, an increase of 45.77% over the 2020 price. Florida has low taxes, a thriving job market and fast growing metropolitan cities. Florida is also known for its high percentage of retirees that are drawn to the state due to there being no retirement taxes and sunshine state is also a popular holiday destination which would affect rental prices.
The recently completed 3162 Plaza Street part of Casa Azzura Coconut Grove townhome development currently asking $1,950,000
According to Zumper, as of June 2023, the current median rent for a 2-bedroom apartment in Miami is $3,900, a 32% year-over-year change. Taverage rent for a 1-bedroom apartment in Miami, FL is $2,835. This is a 29% increase compared to the previous year. The current median rent for a 2-bedroom apartment in Miami Beach as of June 2023 is $4,500, an 46% year-over-year change. The current average rent for a 1-bedroom apartment in Miami Beach is $2,600, an 18% increase compared to the previous year.
This article contains information from the following sources and studies:
Study conducted by PortlandRealEstate.com, a real estate website that specializes in providing comprehensive information and analysis related to the Portland real estate market.
A study conducted by Los Feliz, a Los Angeles-based luxury real estate brokerage with Ruby Home using Zillow: https://www.rubyhome.com/los-angeles/los-feliz/