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Palm Coast Monday, Jun. 20, 2022 1 week ago

No vacancy: Tight market means rental prices going through the roof

With vacancy rates at historic lows, rental prices continue to rise.
by: Brent Woronoff Staff Writer

Housing vacancy rates in the first quarter of 2022 were at or near historic lows according to the U.S. Census Bureau's Housing Vacancy Survey.

The tight market for rental properties can be felt in Volusia and Flagler counties, real estate experts say.

"As soon as we put something on the market, it's gone."

RACHEL TOTH, property manager

"As soon as we put something on the market, it's gone," said Rachel Toth, a property manager for Rent Me Homes in Ormond Beach and Port Orange.

Toby Tobin, a Flagler County real estate expert and the publisher of and host of Real Estate Matters on Flagler Broadcasting, said he's never seen the market this tight.

"In every segment of the market, demand is exceeding supply," he said.

That not only includes home sales but also rentals for single-family homes, duplexes and multifamily housing, he said.

The nationwide rental vacancy rate for the first quarter of the year was 5.8%, the Census Bureau reported. That is higher than the historic low of 5% but lower than the quarterly rate estimate at any point during the 35-year period from 1985 through 2019.

As a result, rental prices have steadily increased. The average price per square foot of Rent Me Homes' rental property was $1 to $1.20 in 2019, Toth said. Now, the average is $1.35 to $1.50 per square foot.

"Price are continuing to rise," she said.

A townhome under 2,000 square feet that would have rented for $1,500 a month last year is now renting at $1,900, Toth said. A three-bedroom, two-bath home that would have rented for $1,400 to $1,800 one to two years ago is now renting at between $2,000 and $2,500 a month, she said.

Toth said new listings are usually gone within 10 days.

"Our portfolio is about 200 homes and 5% or less are on the market," she said.

Until 2019, Flagler County had gone 50 consecutive months without a permit for a multifamily development. File photo

Tobin said that of the 58 longterm rentals listed on the MLS system in Flagler County, only 13 were under $2,000 a month.

And higher prices do not seem to be deterring would-be renters.

"Tuscan Reserve was completed in 2021 and completely occupied in three months," Tobin said.

Until 2019, Flagler County had gone 50 consecutive months without a permit for a multifamily development, Tobin said. That drought ended with the Palms at Town Center's 88 units and Central Landings at Town Center's 233 units.

There are several developments in the pipeline right now. On June 7, the Palm Coast City Council approved a 251-unit apartment complex on a 10.6 acre parcel in Town Center. Construction is expected to begin soon on Dos Palmas, a 285-unit multifamily development at the corner of Matanzas Woods and Belle Terre parkways.

As for single-family home rentals and duplexes, the prices could continue to rise.

"A lot of investors are finding it's an optimal time to sell, and that limits the market," Toth said. "With new purchases at higher prices, we are seeing higher rental prices."

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