Unlike more expensive metros like New York, San Francisco and Boston where Zillow Group Inc.'s Observed Rent Index has fallen -8.8%, -9.2% and -6.3% respectively from January 2020 to January 2021, the typical rents in Orlando are up 2.2%compared to last year, rising from $1,560 to $1,594. Nationwide, rents have risen 0.5% on average during that same time period.
According to a new Zillow report, rents in the Orlando area's wealthier neighborhoods are up just 1.5% year over year, but they're up 3.4% in the least-expensive ZIP codes. That's a 1.9 percentage point difference.
Central Florida's multifamily housing sector continues to see "enormous growth," Caleb Keenan, COO of Altamonte Springs-based apartment developer LeCesse Development Corp., previously said. "We keep waiting for it to slow down, but there are such good long-term fundamentals. It's a hot market."
Roughly 7,517 apartments were built in the Orlando area during the past year, according to CoStar Group research. That's well above the region's historical average of 4,049 units.
Florida's other metros on the list include:
- Miami/Fort Lauderdale, where the wealthier neighborhoods are up just 2% year over year, but they're up 4.5% in the least-expensive ZIP codes.
- North Port/Sarasota/Bradenton: 3.4% versus 4.9%
- Fort Myers: 4.9% versus 5.9%
- Lakeland: 4.7% versus 7.2%
- Tampa: 6.2% versus 6.9%
- Jacksonville: 6.6% for both
- Melbourne: 6.4% versus 7.3%
"This past year saw widespread adoption of work-from-home policies, especially for higher-income renters who previously paid top dollar for proximity to their workplace," Zillow senior economist Jeff Tucker said in a prepared statement. "Demand for these rentals took a hit as many leapt into homeownership, while the flow of new renters entering these sub-markets dried up, at least temporarily."
Among the 52 large metros the Seattle-based real estate company analyzed, the areas with the widest rent affordability gaps are: New York (13.4%), Boston (9.6%), San Francisco (8.7%), Atlanta (7.6%), Seattle (6.3%), Washington, D.C. (5.9%) and Chicago (5.5%).
Zillow classified rents into tiers at the ZIP code level, where the rents were split by thirds. Variation in rents between the lowest tier (most affordable) and highest tier (most expensive) were evaluated using average year-over-year change.