Some of the nation’s largest markets, including New York City and San Francisco, experienced double-digit rent declines as renters head toward the suburbs.
Median rent prices have continued to drop in major cities, according to realtor.com’s latest rental market report released on Thursday.
Rents in San Francisco, New York City, and Washington, D.C., experienced double-digit annual declines in December, while the national median rent for one-bedroom (+0.8 percent) and two-bedroom (2.6 percent) units continued to climb.
“Right now is a great time for renters in major cities to lock in a low price for 2021, but renters in some other areas are seeing a very different trend,” realtor.com Chief Economist Danielle Hale said. ” With more flexibility and more time at home, renters have sought out extra space, driving up rents in the suburbs and less dense markets.”
“As vaccines are being rolled out nationwide, the question is, how much longer will these trends continue?” Hale added. “What’s clear, is that the mantra of real estate being local very much applies to rents, not just home prices.”
San Francisco led the way in rent declines, with the average monthly rent dropping 33.8 percent for studio apartments, 25.5 percent for one-bedroom apartments and 22.8 percent for two-bedroom apartments from Dec. 2019. Other Bay Area markets, such as Santa Clara and San Mateo, also experienced double-digit declines across the board with the greatest declines at the studio level (-19.6 percent vs -14.8 percent).
East Coast markets also reported steep rent declines, with the average rent for all unit types dropping in New York City, Boston, and Washington D.C. New York City led the East Coast with studio prices declining 21.1 percent, one-bedroom prices declining 18.4 percent, and two-bedroom prices declining 16.1 percent year-over-year.
Although these markets are considerably cheaper than their 2019 peaks, they are by no means cheap compared to national median rent prices for studio ($1,309), one-bedroom ($1,483), and two-bedroom ($1,861) units. The median rent in San Francisco ranged from $2,086 for a studio to $3,773 for a two-bedroom. In New York City, median rents reached as high as $5,200 for a two-bedroom.
While prices are down in most of the nation’s largest markets, there are some areas where rent growth is booming compared to 2019. Sacramento led the nation in average monthly increases, with rent rising 20.3 percent for a studio, 12.4 percent for a one-bedroom, and 9.1 percent for a two-bedroom.
New Haven County, Conn.; Essex County, N.J.; and Monroe County, N.Y. shored up the end of the pack with average annual gains of 13.3 percent, 11.9 percent, and 11.9 percent, respectively.