Area vacancies down Rents up

Some real estate statistics, where “falling” and “low” are good news – Jupiter, Tequesta, Palm Beach Gardens and North Palm Beach apartment vacancy rates are at five percent, with 182 vacancies out of 3,608 units, according to a November 2010 through February 2011 survey compiled by L. Keith White, president of Reinhold P. Wolff Economic Research, Inc. in Ft. Lauderdale. The survey covered multi-unit apartment complexes.

“South Florida vacancy rates are as low as they have been in three years,” White said. “There’s demand for rentals, with the overall average rents up 3.3 percent from February 2010.

That rental rate increase followed two-percent declines in 2008 ad 2009, he said. “So, we’ve reversed that trend and it’s back to fairly normal now.”

The reason for the low vacancy rates and the rise in rental price are due to a “tremendous lack of new apartment construction as well as the apartment-to-condo-conversions that took place between 2002 and 2006,” he explained. “We lost thousands of units to conversions.”

Contributing to the demand for rentals are families who’ve lost their homes through foreclosure and short sales and can’t buy, as well as prospective homebuyers who’ve had difficulty in getting a loan, he said.

Another factor, investors buying homes and renting them, impacts the rental market, too, he said. “In Palm Beach County, February 2010, the vacancy rate was 5.1 percent. This year it’s at 5.3 percent.

“It’s a little bit of an increase, and if we didn’t have those single-family homes offered for rent, we would be near zero percent vacancy rate for apartments.”

Concerning leases, White forecasts that over the next two years, increases will be back to normal, “three percent, or four percent if new apartments are not built,” he said.

The days of incentives have declined, but are not over, he added. “When a new rental project is finished, it’s typical to offer one month off for the apartment to try to fill the project up quickly. But, when you are looking at existing projects that have been on the market for a while –no question that the incentives they offer have declined over the last year. And even though there are still some here or there, like offering two months rent, incentives are offered only on vacant units.”

According to White’s survey, average monthly rental rates for apartments in Jupiter/Tequesta/Palm Beach Gardens/North Palm Beach are $1,035 for a one-bedroom units, $1,235 for a two-bedroom units, and $1,467 for three-bedroom units.

Turning the focus to home rentals, Thomas Copeland, of Rental Plus and Camlet Copeland Realty in Jupiter, said, in the last six months, the demand is getting stronger, low inventory has held steady, and price is creeping up a little.

copeland sm
This three bedroom, two-bath home, at 151 Wandering Trail in Jupiter, has tile throughout, an eat-in kitchen, family room, screened patio and a garage. The community, Indian Creek, features a pool, tennis and a park next door. Rent is $1,500 per month, unfurnished and it’s offered by Realtor Thomas Copeland of Rental Plus and Camlet Copeland Realty in Jupiter

“If the price is right, it’s gone within 30 days,” he said.

More than half of the people looking for rentals are looking in the low range, he noted. “Rentals in the $1,000-to-$1,200 range will get them a 900-to-1,000 square-foot apartment in Jupiter Village or Chasewood. About 20 percent of prospective renters are looking in the $1,500-to-$1,800 price range, which will get them about 1,200-square-foot apartment In Indian Creek. Abacoa has some units that start in that price range,” he said. Rule-of-thumb, you can expect to pay $1 per square foot for an unfurnished annual rental,” he added.

He hasn’t seen a flood of investor-owned rentals come on the market, but investors buying up good deals that can be used as rentals do help the market, he added.  “Investors can make money, with 10-to 20-percent down. Properties will carry themselves or give a short return of the capital investment. The cap rate is close to 10percent and you haven’t had that opportunity since the early 1990s.”

Concerning leases, he forecasts they will go up a little – up to five percent — in the next six months to a year. “It won’t be drastic,” he said. “But they’ve been stagnant for two years.”

Waterfront Properties agent Dan Uzzi Dan Uzzi said competition for rentals is “unbelievable.”

uzzi sm
Realtor Dan Uzzi with Waterfront Properties offers this three-story, three-bedroom townhome at 2411 San Pietro in gated Harbour Oaks, Palm Beach Gardens. It’s within walking distance to Downtown at the Gardens and local restaurants. The lease is $2,000 a month.

“I just rented a home. On Friday, there were nine properties that we had scheduled to see. By Monday, that number dropped to six.”

Most popular are unfurnished two- or three-bedroom homes in Abacoa or the Bluffs, or townhouses in Palm Beach Gardens running from $1,200 to $2,500 a month, he noted.

The typical renters are “families who’ve gone through foreclosure, young people not in the position to buy yet, or people who are scared of the market.”

Joe Quirk of Cobblestone Realty, LLC, said in areas he works with (Jupiter, North Palm Beach and Juno Beach), he continues to see a strong demand for rental properties, especially in Jupiter, north of Donald Ross Road, Abacoa and homes in the Jupiter High School district.

Quirk sm
This home at 182 Hampton Circle, Jupiter, has three bedrooms, two baths and a family room. It features tile and wood floors. The house is listed for $2,200 with Thomas Quirk, a realtor with Cobblestone Realty, LLC.

“There’s a good increase of families relocating because of Florida Atlantic University and companies like Scripps and G4S, which used to be Wackenhut. Its new headquarters in Abacoa opened in February and the company has 250 employees. That’s bringing into the area an increase of renters as well as new homebuyer prospects.”

Continued activities relating to foreclosures and short sales also impact rentals, as people with families leave their homes but rent in the same area because they want their children to stay in the same school districts, he added.

And “although rent prices have not changed much since last fall, they’ve maintained,” he noted.

“Spring Training brought in an exceptionally high demand for short-term, furnished, one- and two-bedroom units in Abacoa,” he said. “We were getting inundated with calls by Marlin players and administrative staff as well as fans. There weren’t enough rentals and people were going all the way north to Tequesta and south to West Palm Beach for rentals for February and March. Rates were $4,000 to $6,000 per unit, according to proximity to the stadium, and people have already locked up units for next year.”

Investors, meanwhile, are not flooding the market with rental units, he said. “I don’t anticipate that. Foreign investors, many of them Canadians, are buying foreclosures and fixing them up as second homes. They are not renting them out.”

written for palm2jupiter

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