Realtor.com® October Rental Report: Rent Declines Accelerate in Tech Hubs as Remote Work Prompts the Desire for More Space

Rhea-AI Summary

In October 2020, rents in tech hubs like San Francisco saw significant declines, with studio apartments dropping by 33.3% year-over-year. The median studio rent fell to $1,316, while one-bedroom rents increased by 1.1% to $1,495. Nationally, rent growth is still below pre-COVID levels, but decreases are slowing. The shift towards remote work has led renters to seek more space, especially in urban areas. This trend is reflected in rising two-bedroom rents, which may soon return to pre-COVID growth rates.

Positive

• Median one-bedroom rent increased by 1.1% to $1,495 year-over-year.
• Two-bedroom rents are trending upwards, potentially returning to pre-COVID growth rates.

Negative

• Median studio rent decreased by 0.8% year-over-year to $1,316.
• San Francisco experienced a 33.3% drop in studio rents year-over-year.
• One-bedroom and two-bedroom rents in San Francisco also declined significantly.

SANTA CLARA, Calif., Nov. 13, 2020 /PRNewswire/ -- Rents in the nation's tech hubs continued their descent in October, falling by one-third for a studio apartment in San Francisco year-over-year, according to the realtor.com^® monthly rental report released today. The report also showed that while the declines have begun to slow down nationally, renters are seeking both affordability and more space the longer they work from home.

Nationally, rental growth rates are still far below where they were pre-COVID, but declines are starting to lessen.

The median studio unit rent in October was $1,316, down 0.8% year-over-year. The median one-bedroom rent in October was $1,495, up 1.1% year-over-year. The median two-bedroom rent continued to increase in October.  At $1,869, it was up 2.6% year-over-year, approaching its pre-COVID annual growth rate of 3.5%.

"The combination of tech companies extending their work from home policies through mid-2021 or even indefinitely, and the desire for more space, especially with the weather cooling, is putting pressure on rents in the most expensive urban metros and tech hubs," said realtor.com^® Chief Economist Danielle Hale^®. "Just as we saw with buyers, many renters appear to be looking to escape their urban life altogether, while others are looking for more space. Nationwide, rents for two-bedroom units have begun to bounce back and if the trend continues, price growth could return to pre-COVID levels early next year."

San Francisco led the nation in declines with monthly rents falling 33.3%, 26.3% and 23.4% for studio, one-bedroom and two-bedrooms units year-over-year, respectively. Rents for studios and one-bedrooms in nearby Santa Clara and San Mateo counties also saw double-digit decreases in October.

Outside of the Bay Area, Manhattan, Boston, Seattle, and Washington, D.C. were among the metros seeing the largest year-over-year declines. These markets also represent some of the most expensive cities in the country, giving rents the most room to fall.

In October, the median studio rent in Manhattan was $2,395, down 20.0% year-over-year, accelerating from 15.4% a month earlier. One-bedroom rents in Manhattan were $3,250,  down 16.7% compared to last year, and accelerating from a decrease of 11.7% in September. Two-bedroom rents in Manhattan were $5,333 in October, down 11.1% compared to last year, accelerating from a 4.1% decline a month earlier.

Top 10 markets with largest one-bedroom rent decreases in October

Rank	County	Median Rent	YoY Percent Change
1	San Francisco, Calif.	$2,800	-26.3%
2	New York, N.Y.	$3,250	-16.7%
3	San Mateo, Calif.	$2,541	-13.7%
4	Suffolk, Mass.	$2,585	-13.0%
5	King, Wash.	$1,777	-12.0%
6	Santa Clara, Calif.	$2,454	-11.9%
7	District of Columbia, D.C.	$2,125	-9.6%
8	Middlesex, Mass.	$2,226	-8.8%
9	Honolulu, Hawaii	$1,700	-8.1%
10	Cook County, Ill.	$1,650	-7.4%

Top 10 markets with largest two-bedroom rent decreases in October

Rank	County	Median Rent	YoY Percent Change
1	San Francisco, Calif.	$3,810	-23.4%
2	New York, N.Y.	$5,333	-11.1%
3	Suffolk, Mass.	$3,305	-10.7%
4	Santa Clara, Calif.	$3,001	-10.5%
5	San Mateo, Calif.	$3,350	-9.9%
6	District of Columbia, D.C.	$3,000	-7.1%
7	Erie, N.Y.	$1,183	-6.9%
8	Middlesex, Mass.	$2,748	-6.5%
9	Fairfax, Va.	$1,995	-5.2%
10	Dallas, Texas	$1,513	-4.8%

Methodology: Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). National rents were calculated by averaging the medians of the 100 largest counties, except for studios, which were based on 94 of those counties with at least 20 studio listings.

About realtor.com^®
Realtor.com^® makes buying, selling and living in homes easier and more rewarding for everyone. Realtor.com^® pioneered the world of digital real estate 20 years ago, and today through its website and mobile apps is a trusted source for the information, tools and professional expertise that help people move confidently through every step of their home journey. Using proprietary data science and machine learning technology, realtor.com^® pairs buyers and sellers with local agents in their market, helping take the guesswork out of buying and selling a home. For professionals, realtor.com^® is a trusted provider of consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS^®. For more information, visit realtor.com^®.

Media contact:
Janice McDill, janice.mcdill@move.com, 312.307.3134

View original content:http://www.prnewswire.com/news-releases/realtorcom-october-rental-report-rent-declines-accelerate-in-tech-hubs-as-remote-work-prompts-the-desire-for-more-space-301172591.html

SOURCE realtor.com

FAQ

What rental trends were reported in October 2020 for NWSA and NWS?

In October 2020, rental prices in tech hubs like San Francisco saw significant year-over-year declines, with studio rents dropping by 33.3%.

How did rental prices change in San Francisco in October 2020?

In October 2020, San Francisco's studio rents decreased by 33.3%, and one-bedroom rents fell by 26.3% year-over-year.

What is the median rent for a one-bedroom apartment in October 2020?

The median rent for a one-bedroom apartment in October 2020 was $1,495, reflecting a 1.1% increase year-over-year.

How do two-bedroom rents compare to pre-COVID levels?

Two-bedroom rents are showing signs of recovery and may return to pre-COVID growth rates of 3.5% if current trends continue.

Which cities saw the largest rental declines in October 2020?

Cities like San Francisco, New York, and Santa Clara recorded some of the largest year-over-year rental declines in October 2020.