In response to the pandemic, many city dwellers fled to the suburbs or rural areas for more space and fresh air. This preference for urban areas has split rental trends in urban and suburban / rural areas, with rental growth in suburban and rural areas well above urban rent growth over the past year, according to rental location Zumper.
Since last February, rents in major US metropolitan areas have remained relatively constant. Since then, rents in suburban (large peripheral and medium-sized metros) and rural areas (small metros) have continued to rise, with suburban rents exceeding urban by about 5 to 6 percent and rural rents exceeding urban by about 6 percent 7 percent.
“This pattern is very different from historical standards,” wrote Neil Gerstein, Zumper data analyst and author of Zumper’s report. “Usually rents rise broadly at a constant average percentage, or rents in urban areas rise faster during times of rapid urban growth. The pandemic sparked a number of trends – notably the exodus from large, expensive cities – that caused rents in the suburbs and rural areas to outperform rents in urban areas. “
When tenants wanted to leave expensive metro areas, secondary cities received a lot of attention during the pandemic. In particular places like Newark, New Jersey; Cleveland, Ohio; Indianapolis, Indiana; Providence, Rhode Island; St. Petersburg, Florida; Durham, North Carolina; and St. Louis, Missouri, saw prices rise rapidly during the pandemic. However, Zumper found that growth also largely peaked by the end of 2020. Since then, rental growth in these cities, apart from Durham and St. Petersburg, has largely declined.
The turnaround for these cities, as well as the new growth in the previously declining markets, could be an indication that a year after the pandemic was declared, markets are moving forward to where they once were. For example, Boston and Washington, DC saw significant rental losses in 2020. However, in March 2021, these cities saw average rents rise by 2.0 percent and 5.1 percent, respectively.
In February, one- and two-bedroom apartments saw rental growth at the national level, with one-bedroom apartments increasing 0.6 percent to a median rent of $ 1,248 and two-bedroom apartments increasing 0.8 percent to a median of $ 1,514. These prices rose by 2.2 percent and 2.9 percent respectively compared to the previous year.
Of the 100 most expensive subway areas in the US analyzed by Zumper, St. Petersburg and Durham, the biggest increases in the price of a bedroom came month after month. In St. Petersburg they rose from February to March by 6.7 percent and in Durham by 5.7 percent compared to the previous month.
Overall, expensive coastal markets like San Francisco and New York remain the most expensive for one- and two-bedroom apartments (they are the No. 1 and No. 2 most expensive markets, respectively) even if they see double-digit year-over-year rental rates decline.
Indianapolis, Indiana and Lexington, Kentucky saw the largest month-over-month decreases in one-bedroom rents, down 5.1 percent. Newark, New Jersey, followed, with one bedroom rents falling 4.9 percent between February and March.
Wichita, Kansas and Akron, Ohio have affordable one-bedroom rentals starting at $ 600. That price is down 9.1 percent year over year in Wichita and 1.6 percent in Akron.
Email Lillian Dickerson