The COVID-19 pandemic has reordered where people want to live across much of the United States. Large cities have been hit hard, particularly New York and the large metropolitan areas 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 Americans in the middle and upper class. The activity actually has 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 similar pattern. 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 cities. Unexpectedly, the cities that have been losing population for decades are those 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.
Rents in several very large metros that have a substantial number of affluent people have plummeted. This is particularly true of the tech hubs of San Francisco, San Jose and Seattle.
In these cities, rents dropped the most year over year for one-bedrooms in April:
- San Francisco, California: −45.0%
- Chesapeake, Virginia: −29.4%
- New York, New York: −27.3%
- Long Beach, California: −27.0%
- Colorado Springs, Colorado: −24.6%
- Seattle, Washington: −18.9%
- San Jose, California: −16.2%
- Los Angeles, California: −16.0%
- Jersey City, New Jersey: −15.5%
- San Antonio, Texas: −15.4%