COVID-19 has created significant problems in the residential rental market, with dramatic increases and decreases in rents in certain regions of the country—that is supported by a report from AdvisorSmith, which studied patterns in rental prices in more than 500 U.S. cities to determine which are experiencing the most fluctuation.
"The arrival of the pandemic in the year 2020 has created major changes for many Americans in their ways of life, affecting everything from work to school, creating changes in the economy, as well as affecting decisions about where to live," reported AdvisorSmith's Adrian Mak. "We examined rent prices for studios, 1-, 2-, 3-, and 4-bedroom rental units in September 2020, and compared these to average rents in 2019 for cities around the country. For each city, we determined the weighted average increase or decrease in rents based upon each city’s composition of rental housing units. We then ranked the top 100 cities where rents are rising and falling the most."
Among the cities listed below, rents increased an average of 0.9%. However, the range of rent changes was large, with the widest decrease being -34.7%, and the largest increase being 12.5%.
Here's a breakdown of what they saw (the full report, here [1], includes interactive maps and graphics as well as methodology):
- The cities where rents rose the most in the past nine months include cities on the outskirts of major metropolitan areas, as well as some midsize cities. In particular, numerous cities on the outskirts of the Atlanta, Phoenix, and Baltimore metropolitan areas were represented among the top 25. Additionally, there were strong rent increases in San Bernardino and Riverside counties in Southern California. Other smaller and midsize cities represented in the top 25 included the Spokane metropolitan area; Huntsville, AL; Jackson, MS; August, GA; and Boise, ID.
- Rents fell dramatically in some of the nation’s most expensive cities for renters. The top three spots were taken by cities in Texas and North Dakota with economies focused on oil and energy. With the price of oil plunging due to a reduction in driving during the coronavirus pandemic, demand for housing in these communities has fallen substantially.
- Also highly represented in the top 25 were cities in the San Francisco Bay Area, New York City, the Boston metropolitan area, and a few suburbs of Washington, D.C. Many of these cities, which have some of the highest rents in the country, contain professional and technical workers, many of who have been working from home for much of the year.