Although rent appreciation is forecast to level off over the next 12 months, slowing to an annual rate of 1.1 percent by December, the Orlando area will buck that trend with a slightly higher forecast, a new Zillow Rent Forecast shows.
Over the next 12 months, rents in the U.S. are forecast to increase just 1.1 percent — going from $1,381 to $1,396. However, in Orlando over the next 12 months, rents are forecast to appreciate by 2.2 percent. They increased by 4.4 percent over the past year.
The median rent at the end of 2015 in Orlando was $1,343 and is expected to increase to $1,373 over the next 12 months, Zillow said.
“Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been,” said Zillow Chief Economist Svenja Gudell. “The slowdown in rental appreciation will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up.”
In fact, both Orlando and Winter Park were among the top 10 metros nationwide to see the biggest jump in rents between December 2015 and January 2016, a report from Adobo showed.
But even though Orlando will remain above the national average rent growth rate this year, it won’t be as bad in Central Florida as elsewhere across the country. San Jose, Calif., will see the sharpest rise in 2016 at 7.8 percent, followed by Buffalo, N.Y. (7.4 percent), San Francisco (5.9 percent), Seattle (4.5 percent) and Denver (4 percent).
Miami will see the highest rent increase in Florida, with a forecasted 3.5 percent growth. That ranks the metro No. 7 nationwide.
Zillow notes that the slowdown in rental appreciation indicates that supply of new multi-family homes is catching up to demand.