- 2020 saw unprecedented shifts in rental market largely caused by pandemic-inspired migration shifts
- 2021 now seeing signs that shifts/trends beginning to plateau, reverse a bit, and stabilize
Pandemic-Inspired Rental Market Trends Beginning to Plateau and Shift
2020 saw unparalleled shifts in the national rental market. The priciest cities in the country had rental prices that were +120% higher than those of cheaper cities, according to a recently released study by Zumper, the rental-listing site.
In February 2021, after the price premium between more and less expensive cities essentially bottomed out at a 75% differential in November, that differential slightly reversed itself at 79%.
Rental Prices in Expensive Cities Beginning to Increase in February 2021
Three of the nation’s most expensive cities, New York City, San Francisco/San Jose and Boston, began to see slowdowns in the numbers of renters leaving their cities as well as increases of new renters moving in to these cities for the first time since Q1 2020.
In New York City, one-bedroom median prices that had dropped more than 20% in 2020 increased +4.7% in February. San Francisco saw its median price drop -24.3% in 2020 then saw its median price for a one-bedroom drop only-1.1% in February 2021. San Jose, which had seen a median price drop similar to San Francisco, saw a median price increase of +2.3%. Boston, where the median price of a one-bedroom had dropped more than 18%, saw prices increase.
Cheaper Markets That Saw Rents Spike in 2020 Now Seeing Slowdown in Rent Growth
Neighboring cities to expensive markets saw median rent prices increase dramatically in 2020…+10% in Sacramento (San Francisco ) and +20$ in Richmond VA (Washington DC.
Such rental spikes have slowed considerably to being just +1.9% higher in February 2020 compared to February 2020.
National Rent Growth Stabilizing
Many are seeing a “new normal” in median rents in both expensive and cheaper rental markets. In February 2021, historically expensive cities continued to see rents down by about -17% from February 2020. Rents in less expensive cities were seeing their rents +1.9% higher in February 2021 rather than the +5-8% increase they saw in mid 2020.
The difference in this seeming stabilization is that cheaper cities in the Midwest and Southwest are seeming to maintain their pandemic-inspired higher rent levels as expensive cities are appearing to maintain their lower rent levels.
Thanks to Zumper
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