Big cities have seen an exodus over the last year as people flee their cramped urban apartments in search of bigger suburban and rural dwellings due to the COVID-19 pandemic. That has led to a decline in rental prices in most major urban areas, and now experts say the cheaper prices could sway some people to return to the city.
Realtor.com last week reported that major urban markets such as San Francisco and New York City are posting double-digit declines in rents for one-bedroom and two-bedroom units compared to a year ago. At the same time, apartment rents in less dense areas are rising fast.
The largest decrease in rental rates was seen in San Francisco, where monthly rents have fallen by 34% for studio apartments, 26% for one-bedroom units and 23% for two-bedroom dwellings. Cities such as New York, Boston, Seattle and Washington D.C. have also seen big rental price declines year-over-year
Realtor.com’s chief economist Danielle Hale said that anyone looking to rent in the city should act now to lock in a low price for the remainder of the year.
“But renters in some other areas are seeing a very different trend,” Hale said. With more flexibility and more time at home, renters have sought out extra space, driving up rents in the suburbs and less dense markets.”
As vaccines are being rolled out in the U.S. it will be interesting to see how long these trends continue, but in any case it’s clear that the mantra of real estate being local applies to rents just as much as it does home prices, Hale said.
The current median rent for studio units in the U.S. is $1,309, while for one-bedroom units its $1,483 and for two bedrooms, $1,861, realtor.com’s report found.
The markets leading the country with the largest rent increases are: Sacramento, Calif. (up 20.3% annually for studios; 12.4% for one-bedroom units; and 9.1% for two-bedroom units), followed by New Haven County, Conn.; Essex County, N.J.; and Monroe County, N.Y.