A recent study from Florida Atlantic University suggests that while rent growth in Florida has returned to a more typical range, the affordability crisis persists. According to Ken H. Johnson, a real estate economist and Associate Dean of Graduate Programs at Florida Atlantic University, over the past year, rents have only increased by 2.8% to 2.9%, which is below the usual 3% to 5% range. Johnson considers this range to be the ideal level.
He expressed concern about rents rising higher than this, as it contributes to the ongoing affordability challenge. Johnson emphasized that while the rapid increase in rents may have slowed down, the likelihood of rents decreasing is slim. He believes that the key to resolving this issue is an increase in wages.
Johnson explained, “As our incomes rise, then we’ll become more affordable. And this could take several years. Because Florida incomes are relatively low.” Despite the affordability concerns, South Florida remains an attractive destination for those seeking a fresh start.
David Serle, the president-elect of Broward, Palm Beaches, and St. Lucie Realtors, noted that factors such as high property insurance costs, elevated interest rates, and low market inventory are placing pressure on property prices. He emphasized the importance of consulting a realtor, particularly when exploring down payment assistance programs and alternative financing options. Realtors can offer valuable guidance and serve as a vital resource in navigating these financial considerations.
While Johnson anticipates that the solution of raising incomes will likely take time to materialize in South Florida, he expects that in the interim, there may be an increase in individuals sharing living spaces to manage housing costs.
