Florida and New Jersey Have the Fastest Rising Metro Monthly Rents

Rents are increasing all across the country, but Florida and New Jersey have an intense increase of increasing monthly rent in the United States. Redfin recently examined how average monthly rent increased over the course of 2021, finding that, of the Top 10 highest monthly rent increases, seven of them are located in either Florida or New Jersey. (Rental Market Tracker: Rents Jumped 7% in a Month, Up 21% From 2020 (redfin.com))

When Redfin examined the rate at which rent increased over 2021 in the various metro regions across the country, it found the following ten ranked as the most extreme increases:

Of these ten locations, five are from Florida, while two are from New Jersey. Two of the remaining three are from New York – one of them being New York City. The only location not on the East Coast is Austin, Texas. But why are these cities in particular increasing their rent so drastically? And how does this upward trend positively impact investors?

Rent often increases as a result of an area being low on supply but in high demand. For example, recently, demand to live along Hudson County, NJ – in particular, Hoboken – increased drastically following a series of circumstances. (More and More People are Moving to Hudson County (nria.net)) However, what these recent statistics indicate is that there is a specific move to relocate into these East Coast urban centers more than ever before.

The Redfin article argues that one big reason for the increase in monthly rent is inflation. As the article states, “First inflation came for the for-sale housing market, and now it is coming for the rental market…Many people have been priced out of the for-sale market and are looking to rent instead, but that demand is pushing up rents.” (Rental Market Tracker: Rents Jumped 7% in a Month, Up 21% From 2020 (redfin.com))

However, with these particular urban areas seeing an increase in rent so dramatically higher than the rest of the world, there must be another factor at play to spur on such high prices. In this case, the already-present factors spurring on the increasing rate of monthly rent is spurred on by the increased demand for living space these locations are seeing.

During 2021, both Northern New Jersey and Southern Florida saw an influx of people moving into the area. A 2021 Bloomberg article analyzing the trends of migration in New Jersey’s Hudson County region had this to say, “This year through mid-September, purchase contracts in Hudson County -- also home to Weehawken and Jersey City -- jumped 35% from the same period in 2020, according to data from Otteau Valuation Group.” (NYC-Area Residents Are Buying Up Homes in Hoboken - Bloomberg)

In regards to Florida real estate, statistics have been more consistent from 2020 into 2021. A Bloomberg interview with Blackstone Group Inc.’s Jon Gray offered many insights into the housing market, but a particularly interesting topic came up when he was asked why so many people seem to be interested in relocating to Florida and Texas. To this, Gray stated, “The weather, the lower cost of living, lower taxes, concerns about quality of life. Texas is one of the fastest-growing states in the country, even though it’s enormous. I think that will continue, and it was accelerated a bit by the pandemic. On the other hand, New York City, San Francisco, these are amazing places. And when you think about technology and innovation, entrepreneurship, immigrants -- there will be a rediscovery of these cities. But, yes, Texas and Florida are well-positioned.” (Home Price Bubble In the US? Blackstone's Gray on Real Estate, Investing - Bloomberg)

This indicates that there are different but compelling reasons why individuals are moving to the Greater New York Area and South Florida. While Texas is also a location where rent is increasing, Florida appears to be the best place for investors to keep an eye on, with NJ and NYC being close runners-up. If you are developing rental real estate, then you want to develop in Florida, where the increasing rate of monthly rent appears to be offering highest potential returns.

This is where NRIA comes in. NRIA has engaged in developing real estate up and down the East Coast. From New Jersey’s Gold Coast to South Florida, we’re developing apartments in high-demand, supply constrained locations. This is an opportune time for investors interested in riding the wave of increasing rent rates in urban centers. Among them is The 301, an apartment in pre-development in the heart of Delray Beach, FL.

For more information regarding our individual developments, we encourage you to review our Construction Reports below.

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NRIA GeneralJanuary 28, 2022