Key Highlights
- Unemployment high and vacancies rising
- Leasing activity returning to pre-pandemic levels
- Is outbound migration from cities passing its peak?
With some 30M workers still receiving some sort of unemployment benefits six months after precipitous falls and COVID lockdowns, rental markets around the country have been seeing a slew of vacancies and reduced rents. Finally, for people who still have jobs, it’s a renter’s market and workers are able to afford to live where they want to live for less money than they were paying before the pandemic took hold.
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Jonathan Miller, president of the appraisal firm Miller Samuel, said recently, “I see this as some sort of reset, an improvement in affordability.”
Will this reset continue? And if it does, for how long?
There is new housing market data that indicates new rental leasing activity in big and expensive city markets such as New York and San Francisco is beginning to come back. In New York, for example, new leases in August were down approximately -23% (A LOT!) but nothing compared to the -70.8% decline in April. Those vacancies left behind in April are starting to become occupied.
The shift, it seems, is in price. The natural progression of supply and demand will, in fact, fill those vacancies and leasing activity will return to pre-pandemic levels. The major difference is that rental prices are coming in at lower levels.
On top of lower monthly rental prices, landlords and agents are fighting over potential tenants and throwing in a couple of months of free rent as concessions. For renters, what’s not to like?
Thanks to Curbed.
Also read: Refinance Volume Gets Larger and Larger, NY State Evictions Moratorium Expires & Housing Courts Reopen, Jerome Powell, Chair of Federal Reserve, Expects Interest Rates to Remain Near Zero for Years
