SW Florida Rental Market

According to the US Department of Labor Statistics, the unemployment rate in Naples-Marco Island and Cape Coral-Fort Myers is presently 9.20% and 11.9% respectively. Furthermore, both sub-markets were located in the top 10 metro areas for foreclosure filings according to a study released earlier this year by Irvine, Calif.-based RealtyTrac. Consequently, this has created the proverbial perfect storm for renters.

Rental rates have dropped an estimated 20% to 25% depending on location and unit type. Single family homes and property closer to major linkages are on the lower end of the decline range. Whereas, condos and homes built away from major linkages have experienced the greatest adverse effects for the most part. Furthermore, some owners who are headed into foreclosure have completely abandoned screening and their efforts to secure at-market rental rates have lessened. This, in-turn is somewhat responsible for a part of the decline.

In addition to rental rate declines, rental concessions are still present. Based on leasing data at Synergy Real Estate we are maintaining an average 2 weeks free rent for the greater Naples-Marco Island markets. The Ft. Myers area is generally experiencing average concessions of 3-4 weeks. Additionally, it is worth noting that certain submarkets in Ft. Myers such as Gateway and Lehigh Acres have been hit the hardest. Foreclosures in these markets coupled with over-building and distance to major linkages has produced rental rates declines in excess of 40% and rental concessions approaching two months. For examples, a standard three bedroom single family home could be rented in Lehigh Acres for $700. The exact same home in a central Naples location could lease for $1,100. Qualified renters for these sub-markets are much more difficult to secure and nearly impossible to renew. In addition, many owners have begun to lower their tenant screening standards which have fueled the deterioration of these already declining rental submarkets.

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