2025 Q4 Rental Market Update
All the buzz in market reports and the property management circles is how difficult it is to rent homes right now. Vacancy times are up and rents are down. Recent reports show that this is even more true in what were considered “hot” markets like Tampa Bay area, Austin, TX and Phoenix, AZ. I wanted to provide a market update to give you a clear understanding of current conditions and what we can do to get your home rented as quickly as possible. While this may not be the best news, having clarity allows us to make the best possible decisions together.
If you’d like to schedule a call to discuss how this impacts your home or would like help renting your home, click here.
Market Update / Research
The rental market has shifted significantly due to factors outside our control, resulting in higher inventory and pressure on rental prices. Key factors include:
- Increased inventory from homeowners choosing to rent instead of selling due to difficulty in selling or low-rate “golden handcuff” loans they don’t want to lose. New single-family home construction, apartment developments, etc.
- Reduced migration to Florida and the Tampa Bay area due to higher living costs and recent hurricane impacts. Tampa and Florida were once considered affordable markets, but that’s no longer the case. Wesley Chapel remains a bright spot, but overall demand has cooled.
- Market correction following the rapid rent increases of 2021 – 2022 when rents rose as much as 35% year over year and double-digit increases were the norm.
- Seasonal slowdown – we’re entering the slower leasing months. Historically, October has remained active, but we’re not seeing that this year. Even the summer leasing season was softer than normal, and current industry reports confirm below-average activity.
Impact of Market Conditions
Inventory is high, days on market is increasing, and rent prices are under pressure. Historically, our company – and Real Property Management offices nationwide maintain below-average leasing times of under 30 days. That number has now climbed to about 35 days and is expected to rise further. While it’s hard to pinpoint an exact regional average, current data suggests the industry average is now about 50 days and continues to climb.
What We Can Do
- Price Very Competitively
- Price remains the most effective lever to increase tenant interest. I recommend setting the rent toward the lower 25% of comparable listings (if not the lowest) based on the current market. Holding out for a higher rent increases vacancy time and can cost more than a small price adjustment. If we were testing the market at a higher price than we originally suggested, I recommend we drop it to the lowest price you can. We recommend avoiding the middle or upper end of the market in this cycle to minimize vacancy risk.
- Add a 3D Tour and Floor Plan
- Listings with a 3D tour or floor plan typically generate 30%+ more views. The normal cost is $350, but we’re offering it at $300 (at cost) to help offset your expense. Turnaround time is 3–5 business days once approved.
- Increase the lease term so that we are renewing or turning over the property in the busier time of the year. Right now in November, a 18 month lease will end in May, a better time to be listing the property leading to shorter vacancy and possibily higher rent. Biting the bullet now on price but using this strategy improves the long term outlook.
- Offer an Incentive – Incentives are becoming more common as competition increases. While results vary by property type, here are a few options to consider:
- Credit the application fee upon move-in
- Offer a rent credit (e.g., one month’s rent spread across the lease term)
- Waive pet rent for the first pet
- Include lawn care for single-family homes
- Provide a $100 monthly utility credit
- Offer a mid-lease rent credit (e.g., $300 in month six)
Supporting Industry Quotes
“Only about 10,000 people moved to Tampa in 2024, down from almost 35,000 in 2023. That’s a drop of over 24,000… ‘People used to move to Florida partly because they could get a deal. Now, people can’t afford to move here.’” – Bryan Carnaggio, Redfin agent
“A growing number of unsold homes are being converted into rentals … nearly 2.3% of homes listed for sale over the summer switched to rentals, with higher rates in Sunbelt cities like Dallas, Tampa, and Phoenix.” Wall Street Journal
Factors That Influence Tenant Interest
Some of these are within our control, others are not—but all affect demand:
- Rental price
- Location
- Condition of the property / home
- Pet-friendly policies
- Included utilities or services (e.g., lawn care, garbage service)
- 3D walkthrough or virtual tour availability
- Community amenities
- Parking options