Wednesday, September 10, 2014

SOUTH FLORIDA RESIDENTIAL RENT PRICES AMONG THE HIGHEST IN THE U.S.


SOUTH FLORIDA RESIDENTIAL RENT PRICES AMONG THE HIGHEST IN THE U.S.

We have written plenty about the dozens of new residential projects that are either under construction or in the planning stages. And we have noted that the large majority of these projects are rental projects. While we knew that affordable housing is in short supply which is getting shorter all the time, this article looks at where the area stacks up nationally as far as rental prices for housing are concerned. The news is not good, and has the potential for serious damage to the economy if it continues unchecked the way it is going right now. To start with, average renters in South Florida spend 44% of their income on housing as compared to 30% for the rest of the country. South Florida has the 3rd highest rent in the U.S., tied with San Francisco, which is widely accepted to be the most expensive place to live in the U.S. Only Los Angeles California (48%) and Sarasota (47%) are higher. The rental rates are growing much faster than wages are, especially in South Florida. So when you have residents who are spending all their disposable income on housing, they don’t have much to spend on other things, which hurts the retailers. Then their stocks go down and investors lose money and eventually you have recession like conditions even with a strong housing market. But that is somewhat deceiving. Many of the renters of today are not renters by choice. They have either had credit problems or lack the money for a down payment so buying a home is not an option. So they are trapped renting, and pricing just keep climbing unchecked. As long as the demand is there it is not going to change. I predict that cities that have been down for some time will pick up dramatically in the next few years as people scramble to find more affordable housing options. And for that they be forced to drive farther to their jobs, schools, etc. just to be able to afford a place to live. You can almost feel that housing bubble growing, and who knows when it will burst again? This cannot go on forever that is for sure. As always thanks for reading and have a great day.

Renters feel trapped amid higher costs, stiff competition


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