After three months of rental rate decreases in Sarasota County, dipping numbers may finally indicate a move from fluke to trend.
“I think that three consecutive months of dips in prices signals that things may be leveling off,” says Chris Salviati, senior housing economist at Apartment List, a national online marketplace for long-term residential rentals.
May marks the third month in a row that Sarasota County has seen a drop—even a slight one—in sky-high rental rates. The May decrease was 2.9 percent, and the total dip over the last three months has amounted to a total of 4.2 percent, according to the most recent Apartment List report.
"I think it's attributable to newer apartment communities coming online and helping the rents stabilize. I don't think we'll see 3 percent and 4 percent increases every month like we were," says Larry Starr, executive director of SVN Commercial Advisory Group.
The last time rents in the county went down for three months in a row was in June, July and August of 2020. They ticked upward every month since then, peaking in February of this year, with an overall median rent of $2,030 a month. That made renting in Sarasota-Manatee more expensive than Miami-Dade, where the median rent was $1,887 during the same period.
But Salviati isn’t quick to celebrate a return to what he would consider sustainable housing costs.
“The growth in this area has been astronomical over the past two years. It doesn’t necessarily indicate that things will come back down to how they was before, by any measure. But hopefully, they're finally hitting a ceiling,” he says.
The "astronomical" point he highlights comes from Sarasota-Bradenton-North Port metro data, which shows a 47 percent uptick in rents since March of 2020—the fastest growing among the 100 largest metro areas in the country.
“With that kind of increase, at a certain point something just has to give,” Salviati says. “In the face of almost 50 percent growth over the past two years, it's a little relief, but not much of a consolation."
Based on the May report, the overall median price for a Sarasota County apartment is still $1,945.
In May of last year, the overall median price for a Sarasota County apartment was $1,483, a difference of 31.2 percent. That's twice as much as the national rate, which has seen a rent increase of 15.3 percent over the past year.
In other words, Sarasota County’s median two-bedroom rent of $1,894, while the national average is $1,320—a difference of 43.5 percent.
In Manatee County, which includes ritzy Longboat Key, prices have been slower to cool down. The Apartment List report shows the rent rate has dipped for just the past two months, resulting in a 1.8 percent decline–a negligible amount.
Manatee County's overall median rate for rent is $1,877. Rates peaked in March this year with a median overall price of $1,911 per month. Compared to May of last year, Manatee county's overall median rent has increased by 33 percent. The last time Manatee County saw consecutive monthly dips in rent prices was in April, May and June of 2020.
And while the numbers indicate a cool down, the future of the rental market is tough to predict in light of the recent, sudden jump in bank-financed mortgage interest rates.
"The mortgage applications for first-time home buyers have dropped significantly. I think a lot of folks are realizing that now is not a great time to buy a house and want to wait for interest rates to drop," Starr says. "Florida wages probably won't catch up with those rates, and what was possible for home buyers last year is out of their grasp now."