Gerenme / Getty Images / iStockphoto
Despite the global pandemic, real estate markets in the US boomed last year. There were no peaks in value or demand on the rental markets as there were on the housing market; in fact, some large metropolitan areas recorded a falling rental value trend. However, according to data from the Zumper rental platform, rental costs are accelerating faster due to growth in the larger cities.
While New York City, San Francisco, Oakland, Los Angeles, and San Jose saw the biggest year-over-year drops in one-bedroom rental rates, they are also the most expensive one-bedroom markets by rental prices from the housing guide, according to data.
Apartment Guide collected data on how rental rates are changing in major US cities. The company’s data showed that one-bedroom one-bedroom rental prices in New York City fell 15.2% year-over-year, while the two-bedroom price rose 15.3%. Los Angeles saw an 18.4% decrease in one- and two-bedroom units year over year, while Chicago saw a 12.7% decrease.
Of the eight most expensive cities, rents have dropped 16.3% in May since the pandemic began, compared with January when rents fell 20.1%, according to Zumper.
The pandemic caused one of the largest urban migration. Expensive coastal markets saw rental rates decline as people left on lockdown orders, while the population boom in smaller cities like Orlando and Detroit drove local rental rates higher, reports Zumper. Now the tenants are returning to the big cities.
Zumper pointed out that rents in San Francisco have increased significantly since the pandemic began, with the median rent for a one-bedroom room increasing 1.9% between April and May. In San Jose, rental rates for one bedroom one bedroom have increased 6.3%.
“The acceleration in rental growth at the national level is because the expensive coastal markets are starting to recover, while rents in cheaper cities remain unchanged,” reports Zumper. “Now may be the best time to rent if you want to take advantage of prices while they are still low.”
More from GOBankingRates
About the author
Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but now lives in Ohio, where she attended Ohio State University and lives with her two young children and her fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.