As the COVID-19 pandemic began to wreak havoc on the American economy and millions lost jobs while businesses closed, real estate industry observers expected rental rates to plummet in key cities across the country. So far, this prediction has come true, although not everywhere. The overall rental rate picture is somewhat complex.
In general, rental prices show just a slight fallback when looking at the country as a whole. According to Zillow, the median U.S. rent rate is down 0.03%. That doesn’t seem like much, but it is the largest decrees for a specific time period in two years. The average rental rate is $1,771 per month nationwide.
However, major cities that traditionally harbor the priciest rents are showing a steep decline. The hardest hit cities for landlords have been Washington D.C., San Francisco, Boston, Seattle and Manhattan. San Francisco leads the nation with a 31% drop in median rental rates. Furthermore, four counties in the Bay Area were among the top 10 in the nation for rental rate declines.
Those who have had their eye on a studio apartment in New York City may have an opportunity to finally afford one. Rates for these types of units have dropped by 15%. Overall, rents are down 4.6% in New York. The city of Honolulu has also seen studio apartment rates drop a significant 15%
Boston is the fifth-most expensive city in which to rent among the Top 50 highest-rent cities. Rates dropped by 2.8% making the average in Bean Town now about $2,490.
Some cities have actually seen rental rates rise dramatically in the COVID climate. Tulsa, Oklahoma, had rental rates for studio apartment rise by 36% over the summer months. That’s a dramatic rise, but Tulsa rental is still way more affordable than the highest-rent cities. The average studio apartment in Tulsa can be had for just $745 a month.
Experts point out that there are two distinct rental markets in America — inner-city and “all the rest.” The fact is that rents are only plummeting in major inner-city locations. Because many have been forced to flee their expensive apartments in cities, rental rates are rising prices outside the city as more people are seeking a new place to live.