The cost of Miami rent makes it the most unaffordable city in the US, according to a recent report released by online real estate website Trulia. This news further supports their claim last year that, for Millennials, it is currently much cheaper to buy in South Florida than it is to rent. The story of these high costs will not come as a surprise to many residents stuck in the rental trap as they struggle to try and save for a deposit to buy.
With only 6.9% of rental listings posted as affordable, Miami was the least accessible city in the study, with a median monthly rent of $1,950. Compare this to New York (19.6%) and San Francisco (22.2%), Miami ranks rock bottom on the scale. It is a concern for the first time buyers, as the trend doesn’t look like it’s improving anytime soon. However, there is some news with the continued development of more than 3,200 rental apartments being built in downtown Miami to provide some relief, as reported by Miami Herald.
Let’s explore the actual costs of renting in Miami. Starting with a one-bedroom apartment in the City Centre, you can expect to pay an average of $1,667.61 a month, according to statistics site Numbeo. The rent of a three-bedroom apartment in the same area nearly doubles, at $3,054.69 per month. For a rental outside of the centre, you can expect to pay an average of $1,199.05 per month for a one bedroom, and $2,026.56 a month for a three bedroom. Rentjungle paints a slightly brighter picture over the last six months. Reporting the average apartment rent over the prior six months in Miami has decreased by $100 (-3.6%) One bedroom units have increased by $7 (0.4%) and two bedroom apartments have dropped by $33 (-1.2%)’ However, compare this to the statistics for the last seven years. One-bed apartment prices in Miami have risen over 650 dollars since 2009.
With this in mind, it’s worth to check the cheapest and most expensive rents in Miami area. Unsurprisingly, South Coconut Grove tops the list of average rent by neighbourhood, with an average rent of $3,848 per month. It is nearly $400 a month more expensive than second most costly North Coconut Grove ($3,438) and almost $1,000 more than Downtown ($2,879). Compare this to the cheapest neighbourhoods and the average price in Model City at $1,304 and Overtown being at $1,320. These two communities are far behind the slightly less modest areas of Flagami and Little Haiti, which have averages rentals of $1,761 and $1,777 respectively. West Flagler and Allapattah are the only other two neighbourhoods to come in with an average rental price of under $2,000 per month ($1,794 and $1,891 respectively).
With such prices many worries that Millennials, a key demographic in the rental sector, will be overburdened by the living costs of the city. As a result, renters would be moving to another part of the country where rents prices are more affordable and stable. When looking at the actual number involved in renting when compared to buying, Trulia’s ‘Rent vs. Buy’ calculator shows that buying a property as opposed to renting would work out 57% cheaper in Miami. They show rental costs to be $1,876 a month, whereas the cost of buying comes in at only $816 a month. One report in the Sun-Sentinel claims that it would take just over two years for buying to beat renting in South Florida.
Mortgage rates in Miami are at a current low since 2013, making it a good time for first-time buyers to get on the property ladder. There is one more obstacle: the current lack of available property in the region. With investors often snapping up homes coming in under $300,000 for their lucrative rental potential, it can seem that suitable listing is hard to come by, particularly in desirable areas. Although there is the promise of some relief on the way, it appears that it will be a long while before Miami becomes more affordable to rent.