Question: What are the current rental market conditions in the South Beach neighborhood of Miami Beach?
South Beach — known for its hip culture, extensive dining options and legendary nightlife — is traditionally one of the top choices for existing and new renters living in South Florida.
As a result, South Beach rental occupancies and rates tend to be among the highest in the tri-county South Florida region.
The South Beach neighborhood generally stretches from the southern tip of the barrier island north to the newly refurbished One Hotel & Homes project at 24th Street, and from the Atlantic Ocean west to Biscayne Bay. Belle Isle is included in South Beach for this analysis.
Renters leased an average of 205 properties per month at a median price of $2.43 per square foot in 2014, compared to about 194 units per month at a median price of $2.35 per square foot, according to the Southeast Florida MLXchange.
The year-over-year increases represent a nearly 6 percent jump in monthly lease transactions and a more than 3-percent improvement in median rental rate in South Beach in 2014, compared to a year earlier.
Back in 2010 — the earliest year for which rental information is available — tenants leased an average of 161 properties every month, at a median rental price of $1.91 per square foot.
As a result, the 2014 median rental price is about 27 percent higher than the rate achieved in 2010, according to the data.
Currently, less than 725 properties, at a median asking price of $3.55 per square foot, are listed as available for rent in South Beach.
The current supply of available rental properties in South Beach represents less than four months of inventory — even though the median asking price is 46 percent higher than the rate achieved in 2014.
A balanced market is generally thought to have about six months of supply. A landlord’s market typically has fewer months of supply, and a tenant’s market has more months of inventory.
The unanswered question going forward is whether South Beach can continue to command some of South Florida’s highest rental rates, as Greater Downtown Miami — located less than five miles away and offering thousands of recently built units — becomes an increasingly popular place to live for tenants.
Thought Of The Week: New Downtown Miami rental tower offers views of Collier, Monroe, Palm Beach counties.
An 821-unit apartment building currently under construction in the Brickell Avenue area of Greater Downtown Miami is promoting the idea that future renters in the new 83-story Panorama Tower will soon be able, on a “clear night,” to see the “lights” of the Bahamas.
The marketing claim by a representative of the project’s development group raises the question of what other places might be within view from this planned mixed-use tower on Brickell Bay Drive when it is completed sometime in the second half of 2017.
A quick search of Google Maps suggests that the Bahamas’ Bimini Islands — the destination specifically cited by the rental tower’s development group — are located nearly 60 miles east of the Brickell Avenue Area.
Given the distance, a renter living on a high floor of this new apartment building would potentially be able to see the city of Boynton Beach in Palm Beach County to the north, the Florida Keys’ community of Tavernier in Monroe County to the south and the Big Cypress Swamp Welcome Center in Ochopee in Collier County to the west.
For anyone wondering, the island of Cuba is more than 190 miles to the south and most likely out of view from this planned Greater Downtown Miami rental tower, according to Google Maps.
Peter Zalewski is a real estate market consultant, non-practicing licensed real estate broker and columnist for The Real Deal who now answers reader questions about the South Florida real estate market in a new weekly Friday column. Questions and comments can be sent to [email protected] The TRD editors will choose which submissions will be addressed.