By Gay Cororaton, MIAMI REALTORS Chief Economist
Asking rents on 2-bedroom multifamily units in Miami-Dade County decreased in October 2024, but the multifamily market outlook remains fundamentally sound and strong due to solid job growth, lower cost of renting compared to owning, and Southeast Florida’s cost advantage compared to gateway markets.
In October, the median asking rent on a 2-bedroom multifamily unit in Miami-Dade County decreased to $3,000, down 10.4% from one year ago. The median asking rent rose to $4,200 in May 2022 as migration soared nationwide. Still, asking rents are 43% higher compared to the pre-pandemic level of $2,100 in October 2019.
In Broward, the median 2-bedroom rent was stable at $2,300. In Palm Beach, the median asking rent rose 3.6% from one year ago to $2,900. In Martin County, the asking rent fell 6.3% to $2,100. The strongest rent growth was in St. Lucie County where the median asking rent rose 7.0% to $2.675.
The asking rents are based on approximately 16,000 multifamily listings in October on the MIAMI MLS and non-MLS owner-sourced rental listings on Rental Beast, a tenant screening platform with a database of 12 million rental properties nationally.
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Southeast Florida’s multifamily demand is fundamentally strong
Even as rents are trending down, multifamily rental demand in Southeast Florida is fundamentally healthy due to strong job growth, tight vacancy rates, and the differential between owning and renting.
Sustained migration and solid job growth are supporting a strong rental market in the Miami Metro area. Total non-farm employment rose by 63,000 jobs in the Miami Metro area as of September 2024, a 2.2% increase compared to the national increase of 1.3%. Non-farm employment rose at the 4th fastest pace in the Miami Metro area among the 30 largest metro areas, outpacing the growth in gateway markets like the New York Metro (1.5%), Los Angeles Metro (1.3%), Boston Metro (0.9%), Washington DC Metro (0.6%) and the Chicago Metro (0.1%).
Corporations seeking to relocate their operations look at the cost of housing as an important consideration for attracting workers. The Miami-Fort Lauderdale-West Palm Beach Metro area multifamily rental market remains affordable compared to major East Coast and West Coast gateway metro areas. In October, the mean of listed multifamily asking rents in the Miami-Fort Lauderdale-West Palm Beach Metro area was $2,493, below the asking rents in New York ($3,271), Boston ($2,882), San Francisco ($2,808) , San Diego ($2,735), and Los Angeles ($2,714), according to MIAMI’s analysis of Zillow data. [1] The income needed to afford rents in these other markets is nearly $110,000 and over, compared to nearly $100,000 in the Miami Metro area.
Multifamily rental demand in Southeast Florida is fundamentally healthy due to tight vacancy rates. As of October, the vacancy rates are lower than the 6.8% national vacancy rate in Miami-Dade County (6.1%), Broward County (5.9%), and Palm Beach County (6.1%), according to ApartmentList.com estimates.
The lower cost of renting versus owning will continue to drive multifamily demand among households who are not financially ready to own a home. In Miami-Dade, Martin County, and St. Lucie County, the median asking rent on a 2-bedroom unit is cheaper than the expected mortgage payment, insurance, and taxes on a condominium by about $400 to $600.
Single-family rental demand could also flow into multifamily housing rentals. This is because as mortgage rates come down in 2025 given current trend of inflation heading towards 2%, more demand for for-sale single-family homes could drive up the rent on single-family rentals. On the other hand, more supply is forthcoming for multifamily rentals, which will tend to moderate rent growth. According to Cushman and Wakefield, about 25,000 units are under construction in Miami-Dade County as of 2024 Q3, which is equivalent to two years of the annual pace of absorption.
[1] Zillow Observed Rent Index
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