- According to Zillow, 33.9% of rental listings offered 1+ concessions in October
- Nearly 50% of Gen-Z renters signed leases due to promotions or concessions
- Free/reduced rent by far most common concession offered
Zillow tells us that some 33.9% of rental listings posted on its website in October offered one concession or more. Most commonly, the two concessions offered to potential tenants was either free or reduced rent for a month and/or free parking.
Obviously, concessions produce results, particularly with younger renters. 49% of Gen-Zers who recently moved did so because their new apartment/house rental offered promotions or concessions.
Pre-pandemic just 16% of rental listings advertising on Zillow offered some kind of concession as part of its lease. The concession growth spurt grew to 20.2% in March and to 32.2% by August and then to 33.9% in October as the annual rent growth slowed from 3.9% in March to just 0.9% in August.
Large rental markets offering concessions more than half the time included Washington DC (62.4% of the time), Charlotte (53.9% of the time) and San Jose (52.1% of the time). Large rental markets offering the lowest share of concessions in October included Oklahoma City (12.5% of the time), New York (12.6% of the time) and Buffalo (13.1% of the time).
Renters have paid the biggest price economically during the COVID-19 pandemic as their jobs and/or incomes either flat out disappeared or were reduced. Many moved “home” to save money and many reconsidered their living options per remote working and/or wanting more space due to health concerns. Even if renters who moved from a previous rental to another during this past year, most said they weren’t saving any money on rent. And the Gen-Z renters, 57%, said they were motivated to move because they got a better deal (or concessions) on rent.
In October, according to Zillow, landlords offered a variety of concessions to potential tenants but far and away, some sort of free or reduced months’ rent was mentioned most often in the nation’s 50 largest rental markets. In the country’s six largest rental markets (Boston, Chicago, Indianapolis, New York, Philadelphia and Washington DC) free/reduced rent equaled two months of free rent, assuming a year-long lease of 16.7% or 1/6 off total rent.
Nationally, rent concessions translated into an effective savings rate of 11.5% (or 6 weeks of free rent assuming a one-year lease) in September. The minimum median savings rate was 8.3% or higher in all 50 of the country’s largest rental markets.
Thanks to Zillow.