San Francisco, Seattle and other big cities saw rents drop in October as people sought more space amid ongoing COVID-19 chaos.
In the Seattle area, rent for a one-bedroom apartment fell 12 percent year-over-year in October.
In New York City, it fell 16.7 percent.
And in San Francisco, rent dropped a whopping 26.3 percent.
Those are just some of the more eye-popping numbers out of the latest rental report from realtor.com. The report looks at rental rates in the 100 largest U.S. counties, and overall found that October saw major declines across the board in pricy coastal cities that have tech-oriented economies.
Danielle Hale, realtor.com’s chief economist, explained in the report that “just as we saw with buyers, many renters appear to be looking to escape their urban life altogether, while others are looking for more space.” The driving factor seems to be the coronavirus pandemic.
“The combination of tech companies extending their work from home policies through mid-2021 or even indefinitely, and the desire for more space, especially with the weather cooling, is putting pressure on rents in the most expensive urban metros and tech hubs,” Hale explained.
San Francisco saw the biggest declines for units of all types. In addition to the 26.3 percent drop in rents for one-bedrooms, the city also saw rents drop 33.3 percent for studios and 23.4 percent for two-bedroom units year-over-year.
The median rent in San Francisco in October for a one-bedroom unit was $2,800.
Other areas that saw major drops in rent include San Mateo, California; Suffolk County, Massachusetts; Santa Clara, California; and Washington, D.C., among others.
In addition to economic chaos and hundreds of thousands of deaths, the coronavirus has sent the rental industry and its tenants on something of a rollercoaster this year. After years of rising rents, for example, the early months of the outbreak saw rents in larger cities start to soften. By July, it was clear that multifamily rents across the U.S. were dropping year-over-year for the first time in a decade.
The new realtor.com report indicates that coastal cities are continuing the trend toward rental declines, which will likely be good news to cash-strapped rents, if less so for their landlords.
In any case, the report notes that the median rent for a one bedroom apartment across the U.S. in October was $1,495. That’s up 1.1 percent year-over-year.
The report ultimately concludes that across the U.S., “rental growth rates are still far below where they were pre-COVID, but declines are starting to lessen.”