As a result of the coronavirus pandemic, median rents from March to April declined nationally for the first time since at least 2014, according to a new analysis from Apartment List. That makes sense, given that skyrocketing unemployment has deprived millions of their ability to pay rent, and many places have even put eviction moratoriums in place to, at least temporarily, allow people who are struggling to stay in their homes.
Still, some cities are seeing rent increases.
Usually, the start of spring brings with it an increase in rent: Prices begin to tick up around March and April, peak in the summer, and level off in the fall and winter. This year, in 43 of America's 50 largest cities, rent growth this spring has been noticeably slower than normal and, in many of those cities, prices have even gotten cheaper.
In seven cities, however, demand is such that rent growth has remained steady or has even accelerated a little.
Month-to-month shifts are a good way of evaluating Covid-19′s immediate impact on the market, according to Christopher Salviati, a housing economist at Apartment List and author of the report.
To see how the pandemic has influenced rents, Grow looked at month-to-month rent growth for two-bedroom apartments in America's 50 largest cities based on Apartment List's data. We then took the change between March and April 2020 — normally a period that sees a seasonal increase — and compared it to the same time last year.
While most cities have seen slower growth during this part of 2020 than in 2019, these are the exceptions to the overall trend. In these big cities, rents have actually increased slightly.
Video by David Fang
In these big U.S. cities, meanwhile, rents have held steady despite the coronavirus pandemic.
Video by Jason Armesto
The big cities that have seen the biggest decreases in rent are the places where the coronavirus has most greatly damaged public health and the local economy, according to Salviati. Those include New York, the city most devastated by the pandemic, and several other cities with highly tourism-dependent economies, like Las Vegas and Miami.
On the other hand, many of the local economies able to hold rents steady have workforces that are better organized to weather a pandemic. Only 8.4% of workers in Milwaukee have nonessential jobs that can't be done remotely, according to another Apartment List analysis. That number is around 10% in Louisville, Portland, and Omaha. For comparison, in Las Vegas, 25.5% of employees can't work remotely.
Public health also plays a major role in consumer confidence. If people are afraid to contract or spread the virus while apartment hunting, moving, or otherwise going about their lives, they're more likely to stay put. Despite being the first part of the country to see outbreaks in February, states in the Pacific Northwest have arguably had the most success flattening the curve.
Portland's rents remained steady this spring after they decreased slightly at the same time last year, while Seattle has seen slight increases during both years. Most of the other cities in the list above also haven't been hit as hard by the virus, at least as of early May.
While rents have gone down slightly across the country, there hasn't been a dramatic drop in rents. Prospective renters are less likely to move during a pandemic, especially if eviction moratoriums are in place, and that limits availability.
When supply and demand largely cancel each other out, the market exists in a sort of temporary holding pattern.
Cities that are more expensive are also more likely to see bigger drops in rental prices, according to Nancy Wu, an economist at StreetEasy. "When things are already really expensive, then they have more room to fall as well when there is a sudden drop in supply or a sudden drop in demand," she says.
In 9 of the 10 cities where the coronavirus has most affected rents, the median rate for a two-bedroom apartment is more than $1,000/month. In the least affected cities, 4 out of 7 are below that threshold.
If you're a prospective renter on the market now, try negotiating, even if you previously might not have, Wu suggests. You might also take advantage of generally cheaper markets to get more amenities or a bigger space for your budget.
"Before it was always about commute times versus affordability, but this time around, we're seeing the importance of so many amenities such as square footage, such as in-unit laundry, and outdoor space," says Wu. "All of these factors are going to be really big considerations for renters as they prioritize budgeting versus having everything that they need to stay comfortably at home."
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