Weak Florida Condo Market Leads to Strong Rental Industry

The Florida condo market may have cratered, but an Atlanta-area developer is betting that Delray Beach’s rental apartment market will stay strong.
Wood Partners of Marietta, Ga., in mid-August paid $22 million for 10 acres along Congress Avenue, just south of Atlantic Avenue and across the street from the Tri-Rail station. It plans to break ground in December on a 440-unit apartment complex, said Jay Jacobson, Wood’s South Florida director.

The median condo price in the Palm Beach housing market plunged 23 percent in the past year, the Florida Association of Realtors said in August, and many would-be flippers are forced to rent their empty units. But Jacobson said there aren’t many of those empty condos near his site.

“As long as you’re not in an area where there are a lot of condos that are being rented, the apartment market is strong,” he said.

Renting was considered a fool’s game during the housing boom that ended in 2005. But with Florida mortgages less available and property taxes and insurance bills in the stratosphere, renting a home no longer looks like such a bad deal.

“With the credit crunch, people can’t afford to get a [Florida mortgage], so now they have no other choice but to rent,” Jacobson said.

The property’s seller was Anthony Pugliese, the Delray developer who plans to build a new town in Yeehaw Junction.

SOURCE: The Palm Beach Post