Overbuilding and a move of people from renting apartments to owning houses have caught up with landlords, particularly in some of the largest and most expensive cities. Rents in New York City dropped 10.7% for a one-bedroom apartment in February, compared to the same month a year ago. They slipped less, but were still down notably, in San Francisco, Boston, San Jose and Washington, according to data from the Zumper National Rent Report: March 2017.
A detailed summary of the five most expensive markets:
1. San Francisco, CA maintained its spot once again as the most expensive city to rent. Prices dropped again to $3,270 for a one bedroom apartment, marking a 1.2% decrease. Two bedroom apartment prices stayed the same at $4,500.
2. New York, NY saw prices go up this month for both one and two bedrooms, increasing 0.7% and 3.0% respectively. One bedroom rent bumped up to $2,930 while two bedroom rent dipped to $3,420. Prices for both bedroom types are about 10% down since last year.
3. Boston, MA rent prices dropped 1.3% this month to $2,250 for one bedroom units and grew a slight 0.4% to $2,600 for two bedroom units. Rents for both one and two bedroom apartments are down 1.7% and 1.1% respectively from a year ago.
4. San Jose, CA saw rent prices for one and two bedroom units go in opposite directions this month. One bedroom rents decreased 2.7% to $2,180 while two bedroom rents increased 0.4% to $2,690.
5. Washington, DC found its way into the top 5 this month as it bumped up two spots. One bedroom units went up slightly to $2,010 with a 1% increase. Two bedroom apartments saw a bigger jump of 4.9% to $2,760.
Rents dropped in several other major cities, which include some that have grown little in the past few decades:
– Oakland, CA experienced some heavy dips in rent this month, kicking it out of the top 5. Rents for both unit types are down a whopping 5% this month. One bedroom units stand at $2,000 while two bedroom units go for $2,470.
– Chicago, IL dropped to 10th on the list after decreasing rents for both one and two bedroom apartments caused it to slip two spots. One bedroom apartments now go for $1,730 and two bedroom apartments stand at $2,280 marking a 4.4% and 5% decrease, respectively.
– Nashville, TN fell three spots to 24th this month. Prices took a big hit as one bedroom prices plummeted 4.9% to $1,160, while two bedroom prices fell 1.5% to $1,300.
– Syracuse, NY dropped from 57th to 63rd this month. One bedroom prices sunk to $790 with a 4.8% decrease. Two bedroom prices, on the other hand, spiked up 5.3% to a median of $1,000.
– San Antonio, TX moved down two spots to 51st. A 4.4% decrease brought one bedroom rent down to $860. Two bedroom prices decreased even more with a 5.2% drop to $1,090.
In the boom-and-bust cycle of developers that build when inventory is tight and face financial difficulties when oversupply hits the market, it appears that in several large cities, the bust part of the cycle has already caught up to them.