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'Price war on rentals': Competitive home buyer market puts strain on rental inventory in Florida

Annual income of $47,200 needed to afford a one-bedroom apartment in Palm Beach County
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Posted at 3:14 PM, Sep 09, 2021
and last updated 2021-09-09 17:58:38-04

WEST PALM BEACH, Fla. — Homes and apartments are being taken off listings sight unseen with buyers paying above the asking price.

It may seem like we are talking about the home-buyer market, but it's happening in the rental market too.

This is impacting renters who are seeing price hikes across Florida.

RELATED: County-by-county resources for renters facing eviction

The cost of rent is up 15 to 40 percent depending on where in Palm Beach County you want to live.

Real estate agents said they don't see the rental market cooling off any time soon.

Janetzi Sanchez, renter
Renter Janetzi Sanchez discusses her struggle to find affordable housing in Palm Beach County.

Renter Janetzi Sanchez just rented her dream apartment in Boynton Beach, but it's going to cost her.

"It's still pretty expensive, but it's a furnished apartment," Sanchez said. "I'm paying now $2,600 a month."

The one-bedroom units she was looking at by the water in February were about $2,000 a month in rent, fully furnished and with incentives, including first month rent-free and security deposit waived.

"Whereas now, first, last and other month, so you end up paying almost $8,000 upfront just to move in," Sanchez said.

And that's not the worst part, believe it or not.

The home buyer market is so competitive, it has pushed potential homebuyers back into the rental market, causing a strain on rental inventory.

"Rentals are going within days, even hours," said Jeffrey Levine, chairman of BeachesMLS & past president of Broward, Palm Beaches and St. Lucie Realtors Association. "There is a price war on rentals."

Jeffrey Levine, chairman of BeachesMLS
Jeffrey Levine says renters must jump on a property quickly after seeing something that interests them.

Levine said the inventory is so low on rentals that if you're not fast enough, you can't find a place.

Realtor Robyn Suberi said units are being rented above asking price.

"It's become very competitive. People are kind of using escalation clauses for rentals as well. So you know, somebody is coming into the 'higher than asking price' on the rentals to try and beat out the other people," Suberi said.

According to data from the National Low Income Housing Coalition, the average renter wage in Palm Beach County is $19.56 an hour, and the annual income needed to afford a one-bedroom apartment in Palm Beach County is $47,200, which is about $22.69 an hour.

At minimum wage, you would have to work 105 hours a week to afford a one-bedroom unit.

Realtor Robyn Suberi
Realtor Robyn Suberi discusses the hot housing market in Palm Beach County.

"We're finding multiple family members coming together and renting places together. We're actually seeing people move in with their parents again or roommates," Levine said. "If you go back to last August, the average asking price was $2,300. It's $3,100 this August, so there's been a huge increase asking price on rental housing."

Levine recommends potential renters have their credit reports ready, pay stubs and referral letters from previous landlords.

"If you find something that you're interested in, jump on it. You don't have time to think about it for a couple of days and hope something better will come along in this market," Levine said.

Janetzi said what helped her was making a must-have list and being willing to compromise, knowing she was competing with seasonal renters who are renting sight unseen.

"You can't lose hope. It is a struggle. It's definitely difficult, but at the end of the day you just have to keep trekking because everything is going to pop up. Things go fast, but at the same time keep looking and have high hopes," Janetzi said.

So, what should a renter whose lease expiration is coming up and wondering if he or she should pay the increase in rent to renew or find a new place?

"Unless people have to move, I would just tell them stay put right now," Suberi said.

The rental problem is a national issue at the moment.

Real estate agents say with the mortgage interest rates so low it has caused a strain on the housing market inventory, which has now trickled down to the rental market.

The pandemic has also pushed families to work from home and consider moving to larger units, and then you have the current eviction moratorium, which as a result may free up some inventory, but realtors say it won't make a huge impact.

Visit the National Low Income Housing Coalition for rental averages per state, county and region.