In April we reported that median rent prices only moved slightly, and that trend has continued into May. One-bedroom apartments rose an anemic $4 to a median YTD $1,092, and two-bedroom apartments fell $7 to a median $1347.00. One-bedroom units are up 0.55 percent for the year while two-bedroom apartments are hanging on to a tenuous 0.07 percent YTD rise.
Also indicative of a flat market, we see no double-digit winners or losers on any of our top ten lists.
Let’s take a look.
Before we get into our monthly lists in detail, let’s look at a seriously Coronavirus-impacted area—West Texas. The twin cities of Midland and Odessa are in the heart of the Permian Basin oil fields and the oil market crash caused by COVID-19 has taken a serious toll. During the recent oil boom, motel prices—even for budget brands like Motel 6–were commonly listed $350 per night or more. Now, rooms are available for about $50.
Apartment rent decreases have not been that dramatic, but they have fallen somewhat significantly. In April, a median one-bedroom apartment in Midland listed at $1,236. In May that price fell below $1,200 to $1,198—a 3.1 percent decrease. Odessa’s median $1,115 one-bedroom rate decreased to $1,067—a steeper 4.4 percent loss.
Midland’s two-bedroom median price lost $47 as it dropped to $1,570, and Odessa’s two-bedroom median fell $74—a 4.9 percent decrease. And as oilfield jobs continue to disappear, we look for West Texas apartment rents t continue to soften.
Let’s take a look at the rest of the country.
Our top-ten gainers broke out of their very tight April range, but as we previously mentioned, double-digit movers were still absent from both of our one-bedroom top ten charts, and losers posted the tightest range we have seen in recent years—between 2.03 and 3.38 percent from the bottom up.
Fort Lauderdale, FL was the biggest one-bedroom mover with a sizable 8.35 percent increase to $1,402. Winston-Salem, NC placed second with a 7.41 percent rise to a comfortably affordable $855 rent. Fresno, CA and Durham NC both rose between 6.62 and 6.67 percent, and Detroit, MI was fifth on our increasers list a 4.72 percent gain.
Albuquerque, NM and Norfolk, VA reported identical 4.65 percent gains with Norfolk posting a much higher median rent: $1,284 vs, Albuquerque’s $787. Wichita, KS was alone in eighth place with a 4.41 percent increase to a cheap $639, while Buffalo, NY gained 4.16 percent, Finally, Dayton, OH finished our top ten gainer’s list at $617—an increase of 3.87 percent.
In a statistical anomaly we don’t often see, first place Fort Lauderdale was the most expensive place to live on our top ten gainers list and tenth place Dayton, OH was the most affordable at $617.
As we had previously mentioned, our top ten losers were tightly packed. Honolulu, HI led the group with a fall of 3.38 percent to $1,571. Eugene, OR and Tulsa, OK were the only other cities that fell more than 3 percent with Eugene reporting a median May rent of $1,048, while Tulsa posted $708. Denton, TX fell 2.69 percent, and drafty Green Bay, WI lost 2.55 percent to $649.
Milwaukee, WI was not far behind its Wisconsin cousin, falling 2.53 percent to $1,273, and rounding out the top ten decreasers were Memphis, TN, Jacksonville, FL, Boulder, CO and Virginia Beach, VA, all losing between 2.03 and 2.41 percent.
Two-bedroom gainers reported increases between 3.25 and 8.24 percent—closely mirroring one-bedroom increasers. Our top ten losers didn’t move much–reporting rents in a compact range from 1.83 to 3.72 percent.
Norfolk, VA was the big winner with a hefty 8.24 percent rise to a $1,011 May median rent. Fort Lauderdale, FL rose 5.53 percent to $1699, and New Haven, CT placed third on our top-ten two-bedroom increasers list with a 5.12 percent upward move.
Kansas City, MO and Durham, NC gained 4.0 and 4.33 percent respectively as inexpensive Baton, Rouge, LA posted a 3.76 percent increase to $882. Dayton, OH rose $25 from its April $755 mark, and another Florida hotspot, St, Petersburg gained 3.3 percent. Fresno, CA and warm Glendale, AZ both gained between 3.25 and 3.29 percent.
Not surprisingly, Fort Lauderdale joined its one-bedroom sibling as the priciest two-bedroom apartment on our winners list and Dayton, OH was the most affordable at $770.
Memphis, TN fell 3.72 percent to take the number one spot. Gainesville, FL was not far behind as the city reported a 3.69 percent drop to $1,199. Cool Boulder, CO fell 3.27 percent but still stayed above $2,000. Crazily expensive San Francisco, CA lost $166 in May—a 3.17 percent decline—but median rent there was still over $5,000 per month!
Buffalo, NY, Tempe, AZ, Eugene, OR and Denton, TX lost between 2.14 and 2.71 percent, and Scottsdale, AZ at $1,709 and El Paso, TX at $996 lost 1.95 and 1.83 percent respectively.
Number one on the top ten two-bedroom losers list, Memphis, TN, was the cheapest place to live while—you guessed it—San Francisco, CA (more info on potential rent strike here) was by far the most exorbitant at a big $5069.
Rent Report Recap & What’s Next?
In April, we feared that the COVID-19 induced recession had already arrived. And while some sectors like the stock market seemed to have—at least temporarily—halted their April declines, bad corporate earnings could propel further big market losses. We also mentioned that we felt oil could bottom near $10, and that has happened. Nevertheless, we are not seeing a collapse of apartment rental prices—even in the oil patch.
Last month we asked if landlords would be reticent to request annual rent increases, and we are getting evidence that that is indeed the case. Why face months of possible vacancy for a nominal rent increase?
We also wondered if homeowners would become renters if a wave of foreclosures ensued, but it’s too early to tell as some government regulations now temporarily prohibit foreclosure actions. Therefore, homeowners have not yet been pushed out of homes and into apartments.
It is already more difficult to get construction financing for big projects, so if this recession does last a while, we may eventually see some pent-up demand for new apartment units that could put future upward pressure on rents.
For now, it’s wait and see. A miracle drug or a proven vaccine could turn the economy around in a hurry, and the current darkness could quickly lift. Conversely, if COVID-19 continues to wane but reappears in the fall as some suggest, we could be facing a more prolonged economic slump.
Right now, we are looking for apartment rents trends to continue to flatten or even to dip more significantly as the pandemic plays out.
Be sure to check out our June report.
Each month, using millions of Rentable listings across the United States, we calculate the median 1-bedroom and 2-bedroom rent prices by city, state, and nation, and track the month-over-month percent change. To avoid small sample sizes, we restrict the analysis for our reports to cities meeting minimum population and property count thresholds.
For press inquiries, please contact Sam Radbil.