By Gay Cororaton, Chief Economist
As South Florida continues to experience strong job growth and an increase in population bolstered by the recovery of international migration and more out-of-state movers, the demand is spilling over into the multifamily and single-family rental market as the for-sale market continues to grapple with low levels of inventory.
Total listings of multifamily units and single-family homes on RentalBeast.com and on the MIAMI Realtors® MLS in the counties of Miami-Dade, Broward, Palm Beach, Martin, and St. Lucie rose to 25,681 units, up 131% from one year ago.
The share of single-family rentals rose to 36%, up from 32% one year ago. Asking rents for single-family home rentals rose in the five counties, an indication of the pent-up demand for homeownership.
Download the data report for the county-level data.
Single-family rental listings are gaining market share in the Tri-County area
Single-family home listings took a higher share of the market in August 2023 compared to one year ago in Miami-Dade County (25% from 24%), Broward County (41% from 31%), and Palm Beach (48% from 43%). However, single-family home listings accounted for a smaller but majority share of the listings in Martin County (36% from 61%) and St. Lucie County (62% from 72%).
The median asking rent for single-family home rentals rose in all the five counties: Miami-Dade (5.7%), Broward (2.9%), Palm Beach (16%), Martin (10%), and St. Lucie (8.8%).
Increase in multifamily rental listings are cooling rents in Miami-Dade and Broward
Meanwhile, more multifamily listings pulled down asking rents in Miami-Dade (-3.2% y/y) and in Broward (-3.2% y/y). However, asking rents continued to increase in Palm Beach (4.2%), Martin (18.1%), and St. Lucie (16.7%) despite the increase in rental listings, an indication that demand is strongly outpacing supply in these markets.
One indicator of strong demand is days on market, with listings typically leased out in less than one month: Miami-Dade (23 days), Broward (20 days), Palm Beach (23 days), Martin (17 days), and St. Lucie (23 days).
What’s driving demand for rentals?
The demand for single-family rentals is indicative of the pent-up demand for for-sale homes and the aspiration for homeownership.
However, the lack of supply of for-sale homes one the one hand and South Florida’s strong job growth[1] and rising population[2] on the other hand has led to sustained price appreciation that is piling on top of the impact of elevated mortgage rates making a home purchase more difficult for potential homebuyers.
In Miami-Dade County, the median single-family home sales price and condo/townhome sales price were up 10% year-over-year in July. Month’s supply remains tight especially for single-family homes below $600,000. In Miami-Dade, the active listings for homes below $600,000 make up just 25% of active listings, with less than 2 months’ supply.
The shift towards hybrid work is one structural shift that could be underpinning the rising demand for single-family rentals because workers can live further away from their place of work. US Census Bureau’s American Community Survey shows[3] that 17% of Broward County workers worked from home, slightly higher than the 15% share in Miami-Dade.
Retirees who want to enjoy the comforts of single-family home living and vacation homebuyers are also another demographic group sustaining the demand for single-family homes in South Florida. MIAMI Realtors® analysis of out-of-state buyers based on IRS data shows out-of-state buyers have an average adjusted gross income of over $100,000.[4] They also have significant equity and savings from the sale of their prior home. While retirees have more advantage over younger buyers in purchasing a home, they may also prefer to rent rather than to own a home to give them more flexibility as to when and where to live during the year (e.g., traveling, visiting family, moving to a retirement facility).
[1] South Florida’s Job and Wage Gains are Outpacing the National Trend as of 2023 Q1 – MIAMI REALTORS®
[2] Miami-Dade’s Population Grows in 2022 As International Migration Rises Above 2019 Figure – MIAMI REALTORS®
[3] US Census Bureau Table B08006 ACS, 2021, 1-year estimate
[4] In-Migration Boosted South Florida Household Income by $16 Billion in 2021 – MIAMI REALTORS®
