It’s no news to anyone that the price of residential rentals in South Florida has increased considerably in recent years. According to some, more than in any other part of the country.
On the one hand, there is a historical inflationary process throughout the nation that has affected the real estate market in a particular way. Added to this is the fact that South Florida, and particularly Miami, they have exploded since the pandemic with thousands of people moving there and the generation of thousands of new jobs in the areahave made South Florida one of the most desirable areas in the nation. Due to supply and demand, prices skyrocketed.
But to any rationalization of this type is now added a new component that explains the phenomenon. According to a new report by the Florida Atlantic University real estate market department, temporary rentals of less than six months (mostly through platforms such as Airbnb) of apartments, duplexes and houses have triggered part of the prices .
For the study, interviews were more than 200 real estate agents, tenants and developers, and their answers were combined with real estate market data from the national Zillow website. As is the case everywhere, temporary rentals are more expensive than long-term rental contracts. But particularly in Miami the phenomenon is more exacerbated.
Miami is one of the most expensive Airbnb markets in the world. The median monthly price of a home under a temporary rental contract in the city is $8,024 a month, according to the report. This makes it the third most profitable city for temporary rental property owners in the world, behind only Las Vegas and Honolulu.
In 2021, the latest year for which there is data, 710,000 people used these temporary rental services in Miami, generating earnings that exceeded 200 million dollars in the year.
Since the pandemic, the Airbnb platform has seen a substantial increase in long term rentals (more than 28 days) in the city of Miami. This has made For many owners, it is more attractive to offer their homes on a temporary basis than with long contracts, reducing the supply of properties for regular rentals and, therefore, increasing prices.
Not all buildings in South Florida allow temporary rentals, but this doesn’t necessarily stop people from doing so.