The COVID-19 pandemic has reordered where people want to live across much of the U.S. Large cities have been hit hard, particularly New York and the large metros on the West Coast as people move to more suburban and rural places in the interior of the nation. The flight has been helped by low mortgage rates and a steady income for many middle and upper-class Americans. The activity has actually driven down the supply of homes as they are often snapped up in days after they go on the market.
The apartment market has followed a pattern that is not dissimilar. A new report from Apartment.com shows migration to smaller cities, and, in many cases, ones that are much less expensive than the largest metros. The migration, in turn, has brought down apartment prices in the largest metros. Unexpectedly, cities that have been losing population for decades are cities where rents have surged the most. With the exception of low mortgage rates, the reasons for relocation likely have characteristics similar to home buying.
Apartment.com breaks its analysis of apartment rents into apartment sizes. Its experts point out:
On a national level, we’re noticing a shift in recent patterns. Studios and one-bedrooms are showing some recovery in price, possibly reflecting growing demand. Two-bedrooms have adjusted down slightly, but are still up more than five percent year-over-year. Three-bedrooms are up, both since last month and since this time last year.
Based on city average rents for studios and one-bedroom, rents in some blighted urban areas have gone up sharply. These include Detroit and Buffalo.
These are the cities where rents have gone up the most in April year over year, based on the top 100 metros determined by population:
Kansas City, MO (+33.5%)
Gilbert, AZ (+26.0%)
Las Vegas, NV (+25.3%)
Riverside, CA (+24.9%)
Buffalo, NY (+23.3%)
Columbus, OH (+22.1%)
Durham, NC (+20.0%)
Detroit, MI (+18.6%)
New Orleans, LA (+18.3%)
Virginia Beach, VA (+15.3%)