Since COVID-19 shut down just about every perk that makes living in a teeny, overpriced urban studio apartment even remotely worth it, there’s been a whole lot of talk of a mass exodus from the big, expensive cities. After all, the thinking goes, if you’re jonesing for more elbow room and likely to be working from home well into the future, why not go elsewhere for a fraction of the price?
While there are still plenty of buyers willing to wait out the closures in downtown metros, rents fell in 37 of the nation’s 100 largest counties in December, according to realtor.com®’s monthly rent report. Rental prices are plummeting the most in the highest-priced tech hubs with lots of white-collar workers whose offices have closed due to the pandemic and can suddenly work from anywhere with a reliable internet connection.
“Some of the major factors that attract renters to dense downtowns—proximity to work and restaurants and fun things to do—are not currently relevant,” says realtor.com Chief Economist Danielle Hale. “Without these strong lures, many renters are looking to save money and get some more space by moving to the suburbs.”
Hale expects rents to bounce back after the vaccines have been fully rolled out. But whether prices will return to pre-pandemic levels remains to be seen.
In the meantime, renters can find some pretty darn impressive deals in the big cities—if they act fast.
To figure out where rental prices have dropped the most, the realtor.com economics team looked at the median year-over-year prices of one-bedroom apartments, townhomes, condos, and homes for rent in the 100 largest counties in December. And we found a few surprises along the way.
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Median rent: $2,750
Year-over-year change: -25.5%
With San Francisco’s tech workers untethered from the office, there’s been a steep drop in rental prices and huge increase in vacancies throughout the Golden City. But not all apartments have been affected equally.
Larger one-bedrooms or those rare places with an office and outdoor space that are close to a park have become much more attractive than the small, $3,000-a-month one-bedrooms in SOMA (the hip South of Market district) popular among the walk-to-work types.
Example: This large, rent-controlled one-bedroom in old-money Nob Hill can now be had for $2,850 a month. And this bright one-bedroom is listed at $2,950 per month. Both of these would’ve been nearly impossible to get into a year ago, let alone for under $3,000.
But rental real estate professionals are bullish that the market will recover.
“San Francisco is resilient and the demand will be there in the future, but some landlords are really struggling to fill their apartments,” says Charley Goss, government and community affairs manager at the San Francisco Apartment Association. “When the vaccine is better distributed and employers have confidence in bringing back their workers, the local economy and the rental market will recover.”
2. New York, NY
Median rent: $3,100
Year-over-year change: -18.4%
Though rents have decreased across New York City’s five boroughs, Manhattan has been affected the most because of its wealthier, more mobile residents. In the early days of thee lockdown, the borough lost around 170,000 residents to nearby suburbs and second homes. Those who could afford it, and were now working remotely, headed to the ritzy Hamptons or north to Westchester County, or beyond.
The vacancy rate has tripled, and the market share of rentals with some sort of concession—in some cases two months in free rent—has hit record highs. This newly renovated East Village one-bedroom listed for $2,800 per month is offering a month free, and so is this West Village one-bedroom asking for $3,700.
The numbers look fairly dismal for landlords, but there is a bright side to the mass exodus of wealthy residents. The number of new leases that have been signed over the past few months is up substantially.
“There’s been an inbound migration of youth with greater affordability,” says Jonathan Miller of Miller Samuel. “I think that will lead to another renaissance period for the city.”
Median rent: $2,395
Year-over-year change: -17.6%
San Mateo, which lies on the peninsula smack dab between notoriously expensive bookends San Francisco and Silicon Valley, is also feeling the tech crunch. The traditionally working-class area has long been seeing real estate prices rise in tandem with the influx of tech workers. That explains why 48% of San Mateo renters are considered rent-burdened.
But the pandemic made it possible for many of them to live elsewhere for less. Many others decided now was the time to take advantage of record-low mortgage rates and buy a home with a yard. So now that many of the hoodie-clad denizens have left the rental market, rental prices have finally started to tick back down.
In downtown Menlo Park, about a mile and a half from Stanford University, a recently updated one-bedroom listed at $2,100 is offering a free month’s rent. And this one-bedroom in Brisbane, just a few minutes south of San Francisco, is offering bay and city views for $2,850.
Median rent: $2,500
Year-over-year change: -17.6%
Boston landlords are not just getting hit hard by remote workers seeking cheaper—and most likely warmer—pastures. Many of the students at the area’s 45-plus higher education centers have gone remote, too. This one-two punch means there are a whole lot of apartments and condos that would normally be occupied that are sitting empty on the market.
In fact, right now, there are more units sitting vacant in Boston than there have ever been. So, landlords, especially in pricier neighborhoods like Fenway, Back Bay, and Beacon Hill have been sweetening the deals since early fall.
From free parking and waiving security deposits to luxury units offering five months rent-free with a two-year lease, there’s never been a better time to be a renter (or worse time to be a landlord) in Beantown. Renters can now find luxury one-bedroom units with pool and gym access in the West End starting at $2,500 and similar Back Bay buildings with one-bedrooms starting as low as $1,995.
Median rent: $1,726
Year-over-year change: -14.5%
Some real estate experts claim that nearly half of the rental listings in metro Seattle are offering concessions to potential tenants. Like other gentrified tech hubs, many affluent former renters have been taking advantage of low-interest rates to buy a condo in town or house in the burbs.
Folks who want to be prepared for the city’s eventual comeback can take advantage of all the vacancies, including this $1,895 one-bedroom steps from Pike Place’s world-famous provisions. There is also this nearby one-bedroom, asking $1,625, coming on the market in a couple of months.
Median rent: $2,034
Year-over-year change: -12.9%
Many of DC’s well-paid, highly educated residents just don’t see the point in renting these days. Mortgage rates are so low and they’ve saved up so much money staying home that buying is more appealing than ever.
Plus, many of the amenities they pay for in their luxury buildings have been closed since last spring. So those buildings that offer gyms, pools, and community rooms that would normally function like a work-from-home space are scrambling to find tenants. Who wants to pay for a pool you can’t use?
“None of those [amenities] have been open since April 2020,” says Jordan Stuart, a Realtor with Keller Williams Capital Properties. “Now that we’re in the dregs of COVID people don’t want to be in situations where there are shared elevators.”
To snag tenants as quickly as possible, landlords in even the most coveted neighborhoods are seriously slashing the rent. In perennially popular Dupont Circle, this one-bedroom condo is asking just $1,500 a month.
Median rent: $2,145
Year-over-year change: -12.5%
Many of the forces affecting the other counties on this list also hit Middlesex County’s rental market hard. Renters are fleeing the high-cost market for cheaper parts of the country. Others are buying homes farther out, where their dollars stretch further. And landlord woes in Boston didn’t stick to just the south side of the Charles River.
Like many of the higher education institutions in the metropolitan area, elite Harvard University and the Massachusetts Institute of Technology in the wealthy county’s Cambridge have gone remote. That means that the rentals normally occupied by students are empty. Renters seeking amenities can now find a south-facing one-bedroom with a pool and gym right next to MIT and Kendall Square for $2,675 a month.
Median rent: $1,600
Year-over-year change: -11.1%
Across Chicago, landlords have been trying to tempt renters with price reductions and months of gratis rent. But there are some types of housing that are sitting empty longer than others.
While townhouses and duplexes with courtyards are still clamoring for tenants, units with direct-entry from the outdoors are getting rented out a bit faster than the glut of brand-new apartments and condos in The Loop that require an elevator trip with strangers. Bonus if they have private outdoor spaces.
“We don’t know yet whether [the declines] are because people don’t want to be in a high-rise during COVID,” says Nick Libert, a Realtor with Exit Strategy Realty.
Median rent: $1,650
Year-over-year change: -8.3%
With an influx of new units built over the past half-decade—3,000 in just the past three years alone—Honolulu and greater Oahu have been experiencing rent decreases for the past half-decade. Then the pandemic hit.
Travel to tropical paradise temporarily ground to a halt. A long quarantine period for visitors coming from the mainland and elsewhere also dissuaded folks from moving in. This disrupted the tourism industry, leading many furloughed or unemployed hospitality workers to leave town. Their empty apartments added to the glut on the market.
In Honolulu’s hip Kakaako neighborhood, the median rent decreased from $3,000 in 2015 to $2,750 in 2019. It is now possible to get a one-bedroom in a high-rise with views of the water for $1,450 a month. But across the island, in Kailua’s high-end neighborhoods like Lanikai and Kahala, luxury rentals catering to the ultrawealthy have been flying off the market at sky-high prices.
Median rent: $1,635
Year-over-year change: -7.5%
Just past Arlington and Alexandria counties, Virginia’s Fairfax County has been dealing with many of the same rental conditions found in DC. Big tech companies, like Google and Apple, have gone virtual. So their Northern Virginia employees no longer need to consider commuting to the office.
Many of those well-paid workers are choosing to spend the cash they’ve saved from nearly a year of no travel and little entertainment on a down payment for a house.
“With COVID, [people] haven’t spent the money that they normally spend,” says Keller Williams Capital Properties’ Stuart. So they’re thinking about making offers on homes instead of signing new leases.