Plunging City Rents Could Spawn Urban Resurgence
January 21, 2021
Interest in apartments in big cities has waned during the COVID-19 pandemic, while apartments in less dense areas have surged in demand. A new report from realtor.com® shows that major urban markets, such as San Francisco and New York, are posting double-digit price declines for one- and two-bedroom units compared to a year earlier. On the other hand, apartment rents are increasing in less dense areas.
San Francisco has seen the largest decrease in rental rates in the nation. Over the last year, monthly rents in the city have dropped nearly 34%, 26%, and 23% for studio, one-bedroom, and two-bedroom units, respectively, according to realtor.com®. Rents in New York, Boston, Seattle, and Washington, D.C., also are among the metros seeing some of the largest declines in year-over-year prices.
“Right now is a great time for renters in major cities to lock in a low price for 2021,” says Danielle Hale, realtor.com®’s chief economist. “But renters in some other areas are seeing a very different trend. 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 nationwide, the question is: How much longer will these trends continue? What’s clear is that the mantra of real estate being local very much applies to rents, not just home prices.”
Nationally, the median rent for studio units was $1,309; $1,483 for one-bedroom units; and $1,861 for two-bedroom units, realtor.com® reports.
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.
Updated: June 23, 2021