Contrary to popular misconception across the nation and the world, Florida, and the Tampa Bay area in particular, is not “God’s Waiting Room.” In the Bay area, it never really was. The Sunshine State is not the place where people go to die, although certainly retirees continue to come. With each passing day, it is more a place where younger people, often with families, come to live, or at least try to make a living.
It’s not always easy.
In the 30 years since singer Jimmy Buffett released the song, “Floridays,” the pale invaders and tanned crusaders that he sang about have long since settled down to become neighbors in Riverview, Apollo Beach and Ruskin. And in that time, Florida has surpassed New York state to become the third most populous state in the nation.
During the housing bubble years in the first decade of the 2000s, it seemed as though people were streaming in via an enormous fire hose. Developments sprang up where cows roamed or tomatoes grew, and the projections for growth were sky-high. And then that bubble burst, and it turned out that not all of those homes being built were put up for real live people.
But, despite a lull of a year or two, people are still coming. The housing market is back with a flourish, and the people underwater in their homes swam away only to be replaced by others, mostly buying new homes that would (and still often do) sell for less. Existing homes were scooped up by investing machines and either flipped or put onto the rental market.
And in the process of the bubble bursting, the rental market exploded. Those swimming away, by and large, moved into homes that other people or companies owned, becoming tenants rather than homeowners. Couple that with the maturation of the Millennial Generation along with stagnant wages, and the rental market in Florida, along with other desirable places, has gone red hot.
That the rental market is such is evidenced in any number of ways, including on community social media pages with frequent requests for information on finding a place to rent. And all too often those requests carry expectations and budgets that are simply not in line with reality. It would be the exceedingly rare three-bedroom home in Apollo Beach or in Parrish that is available for $800 per month. Or even $1,100.
There is an old saying that any place that you may really want to live is going to be a very difficult place to make a living. But that rule of thumb is eroding, with companies following the people as they make their way south. In South Hillsborough and Northern Manatee counties, new hospitals, more retail and Amazon have been game changers. Suddenly, what were once sleepy exurbs have become job centers.
People are streaming in and, with credit still tighter than during the bubble years, many of them, along with many Millennials, cannot afford to buy. The rental market reflects that.
According to a report by Apartmentlist.com, a rental market tracking and analysis website, Tampa is the eighth most expensive rental market in Florida, with the average two-bedroom apartment going for $1,150. That is well below Miami, which is the most expensive rental market and with a similar apartment renting for more than $2,100. On the surface, that would appear to be good news: Tampa remains affordable.
According to Apartmentlist, however, Tampa is simply playing catch-up. While rental price increases are slowing and possibly peaking in the Miami area, prices in Tampa are increasing in earnest — rents are 6.5 percent higher today than they were a year ago. That is nearly three times the increase that occurred in Miami and nearly double the Florida average increase since last year.
And even the Florida average of a 3.7 percent rent increase is higher than the national average of 2.8 percent.
In other words, rental rates are growing faster in Florida than in the nation as a whole, and in the Tampa area, they are increasing nearly twice as fast as Florida as a whole.
Florida, with a population closing in on 20 million people, is not “God’s Waiting Room.” The Tampa Bay area never really was. According to the U.S. Census Bureau, in Hillsborough County there are fewer people over the age of 65 and slightly more people under the age of 18 than the national average.
The nation, however, is aging, and Census Bureau data confirms that retirees are still flocking south to Florida, a land of no snow and no income taxes. But the data also reveals that increasingly, the chances are that your new neighbors aren’t buying, they are renting. And, increasingly, they aren’t packing AARP cards but they are coming with their children in tow.
As Jimmy Buffett would sing, “They are looking for better days.” Those better days, those Floridays, are just going to cost more today than they did yesterday.
For the Apartmentlist.com May 2016 Rental Report visit tinyurl.com/observer-rent.