While it is still too early to see the full impact of COVID-19 on the rental market, there’s no doubt the industry will be severely affected.
According to the April rent report from Zumper, a rental listing aggregator, traditional inventory is down around 12% and short-terms rentals are up by 20% to 25%. “It seems short-term property owners originally renting out to traveling guests are now marketing their properties to longer term flexi-stays in response to the collapse in demand from travelers,” the report noted.
Looking at data from over a million active listings in the nation, Zumper found a 0.2% increase overall in one-bedroom rental costs throughout the nation, with two-bedroom rentals up by 0.6%. Year-to-date, one- and two-bedroom prices were up 0.4% and 1.1%, respectively.
The study noted rental declines throughout the East Coast, with the biggest monthly slide happening in Rochester, New York, where the rent on a one bedroom unit dropped 5.2%. Seattle came in at the top of the list for year-over-year decreases, with an 8.5% decline in one-bedroom rentals.
Rents in Chicago actually increased over the month, with one-bedroom units up 3.4% and two-bedrooms up 2.4%. But year-over-year, rent decreased 2% for one-bedroom units and 7.4% on two-bedrooms.
In a blog entry analyzing the results, Zumper’s Crystal Chen noted that, while the long-term impacts are still a bit up in the air, the company remains upbeat about the sector overall. “It is still too early to see the full effects of COVID-19 on rent prices overall, since it really transformed the U.S. markets part of the way through March,” she wrote. “We have an optimistic view for the long-term as the rental market will not be impacted as deeply as industries like travel and hospitality. The rental market tends to be quite countercyclical so in the event of an economic slowdown, the rental market has historically performed well as landlords spend to maintain their rent rolls and as Americans choose to rent not buy.”