How the Pandemic Has Affected the Rental Market Across the Country
Some of the most expensive rental markets in the United States, such as New York City and San Francisco, have seen a sudden and drastic reduction in rent prices. As economic uncertainty related to the pandemic looms over us, these sudden changes are not entirely surprising.
At Southern California Real Estate Management, Inc. (SCREM), we have been helping residential property owners and renters throughout Southern California for over 30 years. We are a full-service residential property management company dedicated to assisting families with their real estate needs. Contact our office at (661) 255-7600 to see how we can help.
Cities With Dropping Rent Prices
As noted in a recent finance article on Aol., rent prices are dropping in some of the largest cities in the country. Across several major cities, rent prices have dropped anywhere between 7% and 15% for studio and one-bedroom apartments. The drops can be attributed to several COVID-related issues, including lost jobs and a switch to remote working.
The cities hit hardest include:
- San Francisco, CA: -10.7% YoY Change
- San Mateo, CA: -10.3%
- New York City, NY: -7.3%
- Boston, MA: -15%
- Pittsburgh, PA: -15%
- Honolulu, HI: -15%
- Seattle, WA: -12%
- Suffolk, MA: -7.9%
How Changing Work Situations Affect Rent Prices
Many news sources have commented on the exodus from urban areas. Virtually everyone has been affected in one way or another by the pandemic. Lost jobs and reduced wages have renters seeking more affordable, less crowded cities.
A shift to remote work has people considering properties that offer more outdoor space and a home office, as opposed to luxury amenities in communal buildings.
Without having to consider a commute, families and individuals alike have been rethinking where they want to live and what a particular area has to offer. The suburbs have drawn a huge number of former-city dwellers.
Renter Incentives
In order to entice renters, property owners have been offering a number of incentives to keep people in the city. According to CNN, in addition to lower monthly rent payments, “pandemic pricing” may include several other perks.
Some of the most popular owner-paid incentives include:
- Waived broker fees
- One month free
- Flexible lease starts
- Two months’ rent-free with a 12-month lease
Markets Hit the Hardest
The pandemic has hit the high-end market the hardest. Once hotspots for the virus, some major cities have been more or less shut down for the last seven months. Many of the extravagant amenities (like gyms and spas) that once drew renters to a particular building have been shuttered or pose a risk to visitors.
All of this has led to a shift to the suburbs where there is more breathing room and less shared space. People are more enticed by in-unit washer and dryers than they are by lavish common areas.
Rent in the Suburbs Has Climbed!
Surprisingly, rent prices in suburbs and formerly less expensive areas are now climbing. Just outside of San Francisco, rent prices in Sacramento are rising 10%-16%. Tulsa, Oklahoma has seen a 36% increase, while suburbs like Hissboro, FL; Montgomery, PA; and Essex, NJ have risen 19%-29%
These increases in rent prices come as a result of more individuals working from home, which has eliminated the need to move or commute into the city. City rent prices are decreasing now that there is more space available, while suburb prices are increasing as more people flock there.
In the Rental Market? Get the Guidance You Need from SCREM.
SCREM has been the leader of suburbia rentals in Santa Clarita for over 32 years. Our real estate experts can help you navigate this new rental market. Whether you are leasing out your property or looking for a place to rent, our real estate experts are here to help you understand trends and forecast rental pricing for your area.
Contact SCREM online or call our office today at (661) 255-7600 to speak with a knowledgeable team member. We offer services for both residential property owners and tenants seeking a rental in Southern California.