Fort Lauderdale Real Estate Market Report 2022/2023 (Part 2)

Introduction to our Residential Rental Market section

We can’t have a discussion about the 2022 Residential Housing Market without reviewing the tremendous changes and growth to the South Florida Rental Market. New market data released by Realtor.com shows that South Florida had the largest increase to rental rates in the U.S. The average rental rate increase was 57.2% above the rates in 2021. This established the new median rent for Miami-Fort Lauderdale-Palm Beach areas at just under $3,000 per month.

The Residential Rental Market was heavily influenced in 2019 by the migration influx of northeastern and west coast relocations. The influx of new tenants depleted available rental inventories. As demand increased, rental pricing increased as well. This created a market prime for investors seeking high returns on investment. Investors flooded the market buying up single family homes and condos to be used as rental properties. As Investors (Secondary home buyers) entered the housing market the available inventory for buyers purchasing for themselves (Primary homebuyers) drastically reduced.

Fort Lauderdale has traditionally been a primary homebuyers market in both condos and single family homes. A primary homebuyers market is more stable and able to withstand outside market influences. An example of this is the Ft Lauderdale condo market vs Miami condo market. A few years back the Miami condo market was plagued with excess inventory and heavy losses when financial insecurity in several Latin American countries caused secondary condo investors to falter. This created instability in the Miami condo market when at the same time Fort Lauderdale remained more stable and resistant to this market downturn. We make this point because a growing secondary market of investors has entered Fort Lauderdale creating vulnerability to outside market influences.

Further Analysis and Observations | Downtown Influence on Rental Market

According to Zumper, Fort Lauderdale had the lowest year over year annual rent increase of +8% when compared with Miami +29% and West Palm Beach +25%. Conversely, Fort Lauderdale has the highest percent of renter households at 41%. This can be explained by the focus of Fort Lauderdale on creating a central “Connectivity” district in the Downtown area. Traditional downtown areas are exclusively business districts. Fort Lauderdale is advancing towards the future with a focus on increasing connectivity downtown. This is being accomplished by prioritizing the development of thousands of new downtown residential units, both apartments and condos. The goal is to blend the line between living and working.

Downtown Fort Lauderdale has experienced an 80% increase in population since 2010 and now has over 24,000 residents living in a 2 square mile area, according to the Downtown Development Authority. As a result of this growth and development, 55% of the real estate square footage downtown is residential, with a primary focus on rental units. There have been 10,000 units built in Downtown since 2010.

The interaction between the Housing Market and the Rental Market clearly has effects on each other. Especially when the growth of the rental / investor market in Ft Lauderdale is undeniable. Follow our future market reports to remain on top of the latest rental trends and how they continue to impact the Fort Lauderdale Housing Market