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October Rent Report: Rents Continue

OCTOBER RENT REPORT:

RENTS CONTINUE TO COOL AS LARGER UNITS INCH TOWARD PRE-COVID LEVELS POWER LENDING

The 2020 real estate market has been a beehive of activities as the economy gradually recovered. As we get deeper into the year, various housing market indicators continue to reveal that the market is bouncing back strongly after suffering severe blows from the pandemic earlier this year, while other indicators are showing the opposite.

October 2020 rent report released recently shows that rents across the country’s 100 largest counties are continuing to slow down. This happens as year-overyear trends are easing since March across studio, onebedroom, and two-bedroom units. In several other big cities, rents are substantially low compared to 2019. The report shows that one-bedroom rents were dropping year-over-year in 34 of the 100 largest counties in October, up from just six in March. On the other hand, two-bedroom rents were also declining year-over-year in 25 of the 100 largest counties in October from last year, up from 12 in March. Nationally, rents are still growing below pre-pandemic rates.

According to the report, rent for a median studio unit in October was $1,316, down 0.8% yearover-year. Studio rents were growing by 5.5% year-over-year in March. Beginning April, all

the seven months have recorded slowdowns in studio rent progressively. The report further shows that the median rent for a one-bedroom unit in October was $1,495, representing a 1.1% yearover-year increase, and a slight increase from 2.3% the previous month. Previously, two-bedroom rents were inclining by 3.5% year-overyear in March. If this pace persists, it will only take a few months for the growth of twobedroom rents to get back to the pre-pandemic rates.

Larger units inch back to prepandemic rent growth rates.

As studio rents seem to slow down consistently since March, larger two-bedroom rents seem to be returning gradually to prepandemic growth levels. As of June, two-bedroom rent growth dropped to 2.1% year-over-year, representing a drop from 3.5% growth in March.

Recently, these two-bedroom rents have begun to bounce back in the 100 largest counties recording a 2.6% year-over-year growth in October. If the trend keeps in that track, growth rates for the larger units are likely to return to the pre-pandemic levels in early 2021.

The ongoing recovery is driven by the growing demand for more living space.

Apart from homebuyers looking for more space, renters too are in search of more space where they can find it as more people are resorting to working from home.

Moreover, as the economy is recording recovery, fewer renters are willing to incur the high cost of renting studio apartments alone. Regarding this, most renters are resorting to living with roommates and moving from studio apartments to larger units to save money in the current harsh economy. The October report reveals that living with a roommate in a two-bedroom unit would save renters an average of 29% on their monthly rental expenses compared to living alone in studio apartments. Even with a continued recovery of the larger unit rents, living with a roommate in a two-bedroom unit will still remain a more economical decision.

Tech centres rents continue dropping. As renters are recovering from the pandemic while searching for more affordable housing, employment opportunities, many are an option for less-crowded neighbourhoods. Large urban centres such as Manhattan, Boston, Bay Area, Washington, D.C, and Seattle recorded the highest year-overyear rent declines. The same urban centres represent some of the most expensive cities in the country, leaving a room for rents to decline.

Elsewhere, on the west coast, tech workers in San Francisco and across the Bay Area (some of the most expensive rental markets in the country) were presented with the opportunity to work remotely, thus reducing the need for residing near their workplace. This freed them up to search for rental spaces in more affordable areas. San Francisco was a top of the list of rent declines in all the three types of units with studio rent dropping by 33.3%, one-bedroom units by 26.3%, and two-bedroom units by 23.4%.

Work cited.

https://www.realtor.com/research/october-2020-rent/.

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Sexual harassment by a landlord or anyone related to your housing violates the Fair Housing Act. If you receive unwelcome sexual advances or are threatened with eviction because you refuse to provide sexual favors, you may fi le a fair housing complaint.

To fi le a complaint, go to hud.gov/fairhousing or call 1-800-669-9777

If you fear for your safety, call 911.

FAIR HOUSING IS YOUR RIGHT. USE IT.

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