April 2024 Data and Market Update: Strong Signs of Improvement in the North Florida Rental Market
A message from our Broker Blakely:
Hello! The historically busy summer leasing season is just over a month away, and with the April 2024 data now available from the MLS, let's take a closer look at how the rental market is shaping up. Overall, there are strong signs of improvement as we move out of the usual winter slowdown. A continued decline in new listings has dramatically improved the absorption rate. In our office we like to refer to May as the "pre summer slumber", leads and showings tick down a few weeks before school is out, with people wrapping up the end of the school year functions, graduations, planning family vacations, etc.
Now let's dive into the April data.
Active Listings
April saw a slight uptick in active listings, rising from 1,475 in March to 1,530 in April. This follows the previous four consecutive months of decreasing inventory, with March marking a 12-month low. The uptick can be attributed to the current sales market, homes not selling, with owners deciding to rent them and higher interest rates of 7.5%+. We are also seeing owners who would otherwise sell, now realizing what a great long term investment rental properties can be at 3-4% rates.
The number of "sold" listings, or as we like to refer to them "rented homes," held steady at around 800 for both March and April with just a slight decrease in rented homes for April.
The graph below illustrates the trend in active listings over the past few months, showing a clear pattern of declining inventory with just a slight increase in April.
Listing Prices
Active Median List Price: $2,000/month (12-month high)
Median List Price for New Inventory: $1,950/month
Sold Median Sales Price: $1,900/month
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The data suggests that higher market prices may be causing rental homes to sit on the market longer than desired.
Days on Market (DOM)
Days on Market (DOM) is crucial for landlords and investors when budgeting and planning. In North Florida, the average DOM is now 39.9 days, which is a 10-day drop from March to April. This decline is linked to the busier season and more accurate pricing based on current market conditions. While much higher than years past, a historically healthy DOM figure should range between 30 and 40 days, we are right at 40. However, some landlords and investors are still asking for higher rents due to rising property expenses, which may be contributing to higher vacancy periods and lower net revenue .
Absorption Rate (in months)
The absorption rate, which measures how many months of inventory are available if no new properties are listed, has sharply declined over the past few months.
November 2023: 2.5 months
March 2024: 1.7 months (12-month low)
April 2024: 1.9 months
While the absorption rate increased slightly in April, it's still down by almost 20% compared to the same time last year.
Summary
Overall, the rental market remains positive with inventory levels decreasing, despite the slight uptick in April. This reduction is helping lower the absorption rate. Prices have rebounded from the lows of October and November 2023, but Days on Market remains a concern. With summer approaching, a surge in inventory is expected, and if demand doesn't keep pace, we may continue to see high vacancy rates until rental prices adjust.
The good news is that DOM is dropping, which is a positive sign for landlords/Investors.
This data comes from North Florida's realMLS and aims to help landlords make better-informed decisions about their rental homes and investments.
If you are needing help with your Investment, Nest Finders Property Management is here to help! www.nestfinders.com
