Palm Beach County Now a Renter’s Market

Now that the Palm Beach County housing market is settling down … guess what? It’s become a renters’ market, according to today’s Palm Beach Post.

And while that’s good for renters, it isn’t welcome news to landlords or home sellers.

Sellers competing for Florida mortgage applicants in the county’s volatile market now have a glut of rental apartments to worry about, according to RealFacts, a multifamily research firm in Novato, Calif.

The average rent in the county from April through June was $1,156. That is an average of all bedroom and bathroom combinations.

It is a 1.6 percent increase over the same period in 2006, according to the report. Meanwhile, occupancy rates in that period was 90.7 percent, down nearly 3 percent from a year ago.

The apartment complexes monitored all have more than 100 units.

“A healthy, balanced market has an occupancy rate of 94-95 percent,” said Chris Bates, sales and marketing director for RealFacts. “At that rate, apartments are available - tenants don’t walk around with a suitcase full of cash - but at the same time, there’s room for rent growth.

“Palm Beach County favors tenants because of its below-market balance,” Bates said. “On the other hand, San Jose, Calif., clearly favors owners. With high occupancy, it allows rents to go up at a rapid rate.”

Palm Beach County mortgage costs have gotten so high that sales slowing is definitely a trend, and Bates said he sees rents following, as well.

“I would anticipate that as long as occupancy stays in the lower 90s, there won’t be much rent growth - and maybe you’ll even see decreases,” he said.

The number of days an apartment sits on the market in the Regional Multiple Listing Service, known as MLS, is another sign that the market is slowing.

“In the MLS, the average days on market (to find a renter) is between 90 and 105 days,” said Todd Breen, president of 624home.com., an affiliate of Re/Max.

“When you have days on market that are three months or longer, that’s extraordinary,” he said.

Of the six cities in the county that RealFacts surveys, Boca Raton had the highest average monthly rent at $1,414, while Lake Worth had the lowest at $978, according to the report.

Rental communities, like sellers of new homes, are offering “so many concessions I can’t remember them all,” Breen said.

Some fence-sitting house hunters have eschewed expensive Florida home mortgage payments and turned into renters again, Breen said.

“One trend is emerging that I find very refreshing,” he said.

“After years of the Florida home loan market taking tenants away by turning them into buyers, we’re now seeing prime tenants - good income and credit - returning to the rental market vs. buying a house in a declining market.”

SOURCE: Palm Beach Post