Same good news as this time last year (here’s the story), 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 3.7 percent (5 percent this time last year), with 128 vacancies out of 3,485 units, according to a November 2011 through February 2012 survey compiled by L. Keith White, president of Reinhold P. Wolff Economic Research, Inc. in Ft. Lauderdale. The survey covered multi-unit apartment complexes.
Palm Beach County overall has improved,” White said. “Rents went up 4.6 percent over last year.” And according to his report, vacancy rates are now at 5 percent – they were at 6 percent this time last year, and generally 5 percent is considered normal.
Last year’s numbers were more dramatic, he notes, because competition from low-priced condos and single-family homes coming onto the market due to foreclosure has settled down. “That’s been an important factor,” he said, “but the biggest factor that has caused vacancy rates to decline and rental rates to increase is the lack of new construction and we will be seeing new construction in the next year or so.”
White also forecasts that over the next two or three years, rental rates increases will be back to normal 4 percent or 4 percent.
According to White’s survey, average monthly rental rates for apartments in Jupiter/Tequesta/Palm Beach Gardens/North Palm Beach have increased 1.9 percent. This year, rates are at $1,032 for a one-bedroom units, $1,257 for a two-bedroom units, and $1,467 for three-bedroom units. Last year, rates were $1,035 for a one-bedroom units, $1,235 for a two-bedroom units, and $1,457 for three-bedroom units.
Two recent studies note that Florida places second with nine markets on the top 33 list for Best 100 U.S. Markets to Invest in Rental Property authored by Local Market Monitor, Inc. This is based on the expected investment return in each market as compared with the national average expected investment return of 5.2 percent.
Also, a new Zillow report released in March, the January Zillow Rent Index (ZRI), showed year-over-year rent gains in 69.2 percent of metropolitan areas, compared to home price gains in only 7.3 percent of the metro areas.
Nationwide, median rents rose an average 3 percent January 2011 to January 2012, but home values continued to fall, declining 4.6 percent during that period.
Turning the focus to single-family home rentals, they are in demand and prices are increasing, noted Virginia Gallopo of Exit Realty Oceanside. “I have clients who buy properties and turn them back over to me to rent,” she said. “They are taking advantage of the low prices of the real estate market and low interest rates. In my 27 years in real estate, this is the first time I’ve seen both so low.
“I just sold a unit for $68,000, and considering that mortgage payments are low, you can see a major return on your investment. And then, eventually home values will go up,” she said.
In Jupiter and Palm Beach Gardens, rents depend on the area.
“I just sold a client’s house and she’s looking for a one-bedroom in Palm Beach Gardens, and I’m seeing them at $950 to $1,000, but it depends on where you are looking. On the beach in Jupiter, rents could go $3,000 to $4,000.” (Gallopo’s phone number is 561-346-8423.)
Shir-Lee Rosenberg, a realtor with 624home.com, said she also sees rental rates going up, with a big demand for single-family homes. In Jupiter and Palm Beach Gardens, prices for three bedrooms plus rental homes range from $1,500 to $2,500 a month, but she sees that there’s also a big demand for homes less that $1,500 a month, and “We don’t have them,” she said.
She attributes the demand for rental properties to the foreclosures and short sales. “People who’ve lost their homes can’t buy for a few years, and people who rented homes that went into foreclosure also needed to find a new place to live.”
She, too, see investors recognizing this demand and buying rental properties. (Her phone number is 561-543-1181.)