As we enter July and are clearly still suffering from the Coronavirus global pandemic, many parts of of the nation are seeing that the high rents being paid are simply not going to work out for tenants in this environment. There are a record number of Americans that are unemployed, and due to this, rents are decreasing in various parts of the country. The report was first mentioned on MarketWatch, and it's being reported at other media outlets as well. Today we'll dive into just exactly which areas are seeing this happen most, as well as talk about how this could change the way business is done long term.
Rents Falling Nationally by 0.1% Between May and June
If you bring the figures back to March, when the pandemic really started to ramp up in the U.S., the figure goes as high as 0.3%. Year over year growth is “by far the lowest” according to Chris Salviati, a housing economist at Apartment List.
Rental activity is usually in it's peak season right now, and we're clearly seeing the financial drains on people thanks to the pandemic.
Some areas of the country are seeing a steeper decline, such as Orlando, Florida, and San Francisco, California. These areas are seeing a 2.2% drip since March, according to the MarketWatch report. Of course, San Francisco was always an expensive city to live in, and the rents were hard to make even during a thriving economy, but this pandemic has clearly made things a lot more difficult. Near by San Jose, California, has also seen rents decrease by 1.7%. New York came in at a 1.8% decrease.
In our backyard, Miami, we're seeing the trend hit us as well, coming in at 1.7%. The report did show that people are showing a desire to move to the suburbs in order to have more space, which will make rental properties with space in high demand in the coming years. (Note – we show you how to invest in and flip these types of properties for a living.) Of course, if this were to happen, it's safe to assume that the rents in downtown areas are going to plunge while the prices of suburban properties should increase sharply.
In another study done by Apartment List, many Americans were said to be nervous about moving while we are still in the middle of the pandemic. Because of COVID-19, 30% of people are most likely staying put throughout 2020.
However, 17% of people who are renting have said that they are looking for something more affordable. There is a nationwide shortage of affordable accommodations, and there could be a huge spike in interest while the luxury market suffers.
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