Getting in while the getting is good
- June 15, 2015
- / Carlton Proctor
- / economy
Two years ago Shelby Phillips moved to Pensacola from Tuscaloosa, Ala., and her relative ease in finding a place to live offers a revealing look at the local housing market's internal dynamics.
Like most new arrivals, Phillips, 24, initially looked for a place to rent.
Within days she found a small apartment in East Hill, and split the $700 a month rent, all utilities included, with a roommate.
A year later she moved to a larger condominium unit off Davis Highway that also rented for $700 a month, but did not include utilities.
Earlier this year, Phillips, a Baptist Hospital employee, and her boyfriend, a former Marine and now a deputy sheriff, decided to go into together and buy a home, and within a month closed the sale.
"I have never had a hard time finding a place to rent in Pensacola," Phillips said.
These days, that seems to be the norm for the Pensacola area. There are plenty of rentals available in multi-family apartment complexes, and prices seem to be holding fairly steady — mostly in the $700 to $800 range.
Phillips' experience mirrors that of Minnesota transplant Noah Tufto.
Tufto moved to Pensacola about 18 months ago after landing a job with the Blue Wahoos professional baseball team.
[caption id="attachment_24374" align="alignright" width="450"]
Noah Tufto prepares burgers at his East Hill residence in Pensacola, Tuesday, June 2.(Michael Spooneybarger/ Pensacola Today)[/caption]
Initially, Tufto and his girlfriend, shared a small garage apartment in East Hill, each paying $425 a month.
But more recently, they found a larger apartment, with a backyard at the same price.
"As far as where I came from in the St. Paul and Minneapolis area of Minnesota, it's a lot cheaper here," said Tufto, who now works in marketing for the local owner of several McDonalds franchises.
Although happy with his current apartment, Tufto said if "money were no object" he would be looking for an apartment or condo in downtown Pensacola.
"It would be kind of cool living downtown, but you'd be paying $1,500 to $2,000 a month for a two-bedroom, and that's way too much for me right now," he said. "I want to keep my rent as low as possible."
Tufto is wise to watch the bottom line. Escambia County can be an area where the cost burden of renting is an issue.
The cost burden of renting is measured as the percentage of people who spend more than 30 percent of their monthly income on rent — 30 percent being the rule of thumb for affordability based on your monthly income.
Data in the Studer Community Institute’s Pensacola Metro Report showed that 57.8 percent of Escambia residents pay more than that rule of thumb recommends.
Home prices pressing rents up
There is one segment of the rental market that is undergoing major changes: Single family homes.
"In terms of sales, the number of single family homes on the market is increasing," said Nicole St. Aubin, a broker associate with Realty Masters of Florida. "The number of single family homes on the rental market has been decreasing about 5 percent over the past three years."
That decreasing inventory of single family rental houses, not unexpectedly, is slowly driving up prices, according to Realty Masters' data.
For example, in 2011 nearly 5,000 properties — including single family homes, condos and apartments — were rented in the greater Pensacola market with an average monthly rent for all at $961.
In 2014 the number of rental properties had dropped to 4,279, and average monthly rents had climbed to $1,037, an 8 percent increase.
What's driving that increase, St. Aubin said, is that prices for single family homes are climbing. That impacts property owners' decisions.
"Single family home owners are selling their property rather than renting it because home prices have gone up," St. Aubin said. "They are deciding they would rather not be landlords."
Mark Downey, owner of Mark Downey & Associates in Pensacola, agrees with St. Aubin's take on the rental market.
"A lot of my clients who were forced to lease their homes because of depressed prices are now able to sell their properties," he said. "As a result, that's hurting the supply of actual single family rentals on the market."
Downey said he used to manage up to 600 rental units. That number is now 475 and continues to inch downward.
"My guess is now a large segment of the housing market is trying to find affordable single family homes and are moving away from the multi-family rental units."
As a result, Downey, also sees rental prices for single family units rising much more rapidly in 2015 than in the past six or seven years.
Rentals going fast
Both St. Aubin and Downey said choice single-family home rentals, especially in desirable districts, such as Gulf Breeze and Northeast Pensacola, are in great demand.
In fact, the market is so strong, rentals that go on the market Monday morning, often are snapped up before lunch that same day.
With only around 400 single family homes current on the rental market, and precious few in highly desirable neighborhoods, he who hesitates is lost.
Both St. Aubin and Downey say that trend will continue as long a single-family home prices continue to rise.
"It's been really hard this year," said St. Aubin. "We're getting multiple applications when rental properties come on the market, and people are getting aggravated because rental properties are getting rented so quickly."
Noah Tufto prepares burgers at his East Hill residence in Pensacola, Tuesday, June 2.(Michael Spooneybarger/ Pensacola Today)[/caption]
Initially, Tufto and his girlfriend, shared a small garage apartment in East Hill, each paying $425 a month.
But more recently, they found a larger apartment, with a backyard at the same price.
"As far as where I came from in the St. Paul and Minneapolis area of Minnesota, it's a lot cheaper here," said Tufto, who now works in marketing for the local owner of several McDonalds franchises.
Although happy with his current apartment, Tufto said if "money were no object" he would be looking for an apartment or condo in downtown Pensacola.
"It would be kind of cool living downtown, but you'd be paying $1,500 to $2,000 a month for a two-bedroom, and that's way too much for me right now," he said. "I want to keep my rent as low as possible."
Tufto is wise to watch the bottom line. Escambia County can be an area where the cost burden of renting is an issue.
The cost burden of renting is measured as the percentage of people who spend more than 30 percent of their monthly income on rent — 30 percent being the rule of thumb for affordability based on your monthly income.
Data in the Studer Community Institute’s Pensacola Metro Report showed that 57.8 percent of Escambia residents pay more than that rule of thumb recommends.
Home prices pressing rents up
There is one segment of the rental market that is undergoing major changes: Single family homes.
"In terms of sales, the number of single family homes on the market is increasing," said Nicole St. Aubin, a broker associate with Realty Masters of Florida. "The number of single family homes on the rental market has been decreasing about 5 percent over the past three years."
That decreasing inventory of single family rental houses, not unexpectedly, is slowly driving up prices, according to Realty Masters' data.
For example, in 2011 nearly 5,000 properties — including single family homes, condos and apartments — were rented in the greater Pensacola market with an average monthly rent for all at $961.
In 2014 the number of rental properties had dropped to 4,279, and average monthly rents had climbed to $1,037, an 8 percent increase.
What's driving that increase, St. Aubin said, is that prices for single family homes are climbing. That impacts property owners' decisions.
"Single family home owners are selling their property rather than renting it because home prices have gone up," St. Aubin said. "They are deciding they would rather not be landlords."
Mark Downey, owner of Mark Downey & Associates in Pensacola, agrees with St. Aubin's take on the rental market.
"A lot of my clients who were forced to lease their homes because of depressed prices are now able to sell their properties," he said. "As a result, that's hurting the supply of actual single family rentals on the market."
Downey said he used to manage up to 600 rental units. That number is now 475 and continues to inch downward.
"My guess is now a large segment of the housing market is trying to find affordable single family homes and are moving away from the multi-family rental units."
As a result, Downey, also sees rental prices for single family units rising much more rapidly in 2015 than in the past six or seven years.
Rentals going fast
Both St. Aubin and Downey said choice single-family home rentals, especially in desirable districts, such as Gulf Breeze and Northeast Pensacola, are in great demand.
In fact, the market is so strong, rentals that go on the market Monday morning, often are snapped up before lunch that same day.
With only around 400 single family homes current on the rental market, and precious few in highly desirable neighborhoods, he who hesitates is lost.
Both St. Aubin and Downey say that trend will continue as long a single-family home prices continue to rise.
"It's been really hard this year," said St. Aubin. "We're getting multiple applications when rental properties come on the market, and people are getting aggravated because rental properties are getting rented so quickly."
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