Rental market is humming

Rental market is humming

Meanwhile, the segment of the real estate market that seems to be working most efficiently at the moment is the rental market. As people leave densely populated cities to escape COVID-19 and congestion, rents are dropping. In San Francisco, rents fell 24% in 2020, according to Zumper.com, which tracks rents across the country. They were down nearly 20% in New York and 17% in Boston.

In cities like Newark, New Jersey, Sacramento, California, and Richmond, Virginia, where people are relocating, rents are moving sharply in the opposite direction.

"The top eight cities in the nation, which were very hot and very millennial heavy, have seen enormous declines in rent, while secondary cities in the same regions have benefited," said Anthemos Georgiades, co-founder and chief executive of Zumper.com.

Median home prices in cities experiencing major out-migration, however, have not fallen – at least not yet. New York, for instance, saw rents drop by 20%, but its median home prices rose 6%. The same trend holds true in San Francisco, Boston, Los Angeles and Washington, D.C.

Georgiades says that's because the rental market is much more dynamic than the "for sale" market.

"Rent prices adjust super quickly to the realities of the market," Georgiades said. "If I get a vacancy in April, the clock is ticking. I've got a depreciating asset. I'm going to drop my price fast to get someone in there."

https://www.usatoday.com/in-depth/money/2021/02/04/homes-sale-we-housing-bubble-prices-outstrip-wages/6671282002/