Surges & Plunges: Update on Rents in the Top 100 US Cities

Wolf Richter wolfstreet.com, www.amazon.com/author/wolfrichter

Rents plunge in Chicago, Honolulu, New York, Washington DC, and others, but surge in many markets.

Across the US in August, the median asking rent for 1-bedroom apartments rose 2.2% from a year ago, to $1,209. For two-bedroom apartments, it rose 3.2% to $1,447. But national numbers average away the often-double-digit drama, up and down, that renters and landlords experience in individual markets, with rents soaring over 10% and even over 16% year-over-year in some markets, while rents plunged in other markets.

For example, in Southern California, rents are jumpy: In San Diego, the median asking rent for 1-BR apartments in August rose 9.8% year-over-year to $1,810; and for 2-BR apartments, it rose 8.7% to $2,490. In Long Beach, 1-BR asking rents jumped 14.6% and 2-BR asking rents 8.7%.

In 12 less expensive markets, rents jumped by 16% or more.

But some cities go in the other direction. In Chicago, for example, rents peaked in October 2015 and have since spiraled down 26% for 1-BR apartments and 30% for 2-BR apartments.

Every market has its own dynamics. Like many cities, Chicago has had an apartment construction boom. In the Chicago-Naperville-Elgin metro area, with 9.5 million people, 10,700 apartments are scheduled to be delivered in 2018. But Chicago’s population peaked in 2014 and has since dropped by 27,000 people. So a lot of new supply meets declining demand.

These are median asking rents. “Median” means half of the apartments rent for more, and half for less. “Asking rent” is the amount the landlord advertises in the listing. The apartments are in multifamily buildings, including new construction. But single-family houses for rent are not included. “Rooms,” efficiency apartments, and apartments with three bedrooms or more are not included. The data is not consumer-survey-based. It was collected by Zumper from over 1 million active listings of apartments-for-rent across the US during that month.

The data in Zumper’s National Rent Report reflects the current market as landlords are pricing it. But the data does not include “concessions,” such as “1 month free” or “2 months free.” In markets where concessions prevail, the effective rent for the first year of the lease would be lower than the asking rent.

No one tracks actual lease signings, and landlords do not report them. Only consumer surveys, such as those conducted by the Census Bureau, provide some survey-based insights into that, long after the fact.

The table below shows the 17 of the 100 most expensive major rental markets in the US. The shaded area reflects peak rents and the movements since then. The black “0%” in the shaded area means that these markets set new records in August. If rents are down slightly from the peak a few months ago, it doesn’t yet mean that the market has turned – a turning point would require a more significant decline in rents spread over a number of months beyond seasonality.

Some standouts:

San Francisco is by far the most expensive major rental market in the US. There are more expensive markets, including some towns in Silicon Valley, but these are too small to make the list. San Francisco rents peaked in October 2015. By late 2017 and early 2018, 2-BR rents were down about 12% from the October 2015 peak of $5,000. But starting in the spring this year, rents started rising again. At this point, they still remain below their 2015 peak.

Washington DC rents have suddenly come under pressure: 1-BR rents in August are down 8% from their peak in December 2017. And 2-BR rents have plunged nearly 15% from June 2017.

New York City, the second most expensive rental market, looks to be trying to find a bottom. Year-over-year, asking rents are up slightly but have fallen by the double-digits from their peaks in March 2016.

Honolulu rents rank up there with Chicago. The median asking rent for 1-BR apartments has plunged 19% from the peak in March 2015. And the median 2-BR rent has plunged 29% from the peak in January 2015.

In the Seattle metro, a historic construction boom is likely to deliver 8,600 new apartments this year, with 25,000 additional apartments under construction. In addition, a large number of apartments were completed in prior years. This flood of supply coming on the market is high-end, and affordability has become a crisis, though not quite as bad as in San Francisco.

Despite this onslaught of supply, Seattle’s median 1-BR asking rent hit a record in June, and August was off just a tad. But 2-BR rents are 8% below the peak in April 2016. Price resistance appears to have kicked in, and people are compromising on space to get a slightly less expensive but smaller unit. There is anecdotal evidence that the market has turned, but the only place where this is showing up in the asking-rent numbers is in 2-BR apartments.

Some of the remaining markets in the US have experienced double-digit year-over-year rent increases – including 12 cities where these increases reached 16%, such as in Cleveland, OH, or Wichita, KS.

In fact, in the lower half of the list of the 100 most expensive rental markets (below), year-over-year rent increases of 15% and over are fairly common. So when some people say that their rent increases were much higher than the increases in the Consumer Price Index for rent, that’s why. For these people exorbitant rent increases are real. But in other cities, rent declines have set in, which water down the national average.

The table below shows Zumper’s list of the 100 most expensive major rental markets in the US, in order of median asking rent for 1-BR apartments in August, and percentage changes from a year ago (use the browser search function to find a city):

1 BR Y/Y % 2 BR Y/Y %
Pos. City Rent change Rent change
1 San Francisco, CA $3,570 5.3% $4,700 3.1%
2 New York, NY $2,870 0.7% $3,270 2.2%
3 San Jose, CA $2,550 8.5% $2,970 6.8%
4 Los Angeles, CA $2,320 7.9% $3,200 0.0%
5 Boston, MA $2,310 5.0% $2,700 3.8%
6 Washington, DC $2,160 -5.3% $2,810 -11.6%
7 Oakland, CA $2,130 5.4% $2,620 3.6%
8 Seattle, WA $1,950 0.0% $2,430 -1.2%
9 Santa Ana, CA $1,830 6.4% $2,140 9.7%
10 San Diego, CA $1,810 9.7% $2,490 8.7%
11 Miami, FL $1,800 0.0% $2,380 -4.8%
12 Honolulu, HI $1,730 -0.6% $2,100 -7.9%
13 Anaheim, CA $1,680 5.7% $2,130 7.0%
14 Long Beach, CA $1,570 14.6% $2,020 9.2%
15 Philadelphia, PA $1,540 9.2% $1,730 8.1%
16 Chicago, IL $1,520 0.7% $1,860 -15.5%
16 Denver, CO $1,520 15.2% $1,930 7.2%
18 Atlanta, GA $1,470 10.5% $1,870 10.7%
18 Fort Lauderdale, FL $1,470 -5.2% $2,000 5.3%
20 Providence, RI $1,440 0.7% $1,520 3.4%
21 Minneapolis, MN $1,410 11.9% $1,910 7.9%
22 Portland, OR $1,400 3.7% $1,640 2.5%
23 Baltimore, MD $1,390 7.8% $1,740 16.0%
24 New Orleans, LA $1,370 9.6% $1,550 -1.9%
25 Nashville, TN $1,360 14.3% $1,400 0.0%
26 Madison, WI $1,290 7.5% $1,410 13.7%
27 Dallas, TX $1,260 -7.4% $1,710 -9.0%
27 Houston, TX $1,260 13.5% $1,600 16.8%
27 Sacramento, CA $1,260 11.5% $1,460 13.2%
30 Orlando, FL $1,240 12.7% $1,460 16.8%
30 Scottsdale, AZ $1,240 3.3% $1,900 -9.5%
32 Austin, TX $1,200 9.1% $1,490 6.4%
33 Tampa, FL $1,170 11.4% $1,390 13.0%
34 Charlotte, NC $1,150 2.7% $1,290 4.9%
34 Plano, TX $1,150 0.0% $1,560 0.6%
36 Aurora, CO $1,140 14.0% $1,440 3.6%
37 Durham, NC $1,130 10.8% $1,270 15.5%
38 Newark, NJ $1,120 12.0% $1,390 15.8%
38 Pittsburgh, PA $1,120 -11.1% $1,350 1.5%
40 Irving, TX $1,110 -6.7% $1,460 -0.7%
41 Gilbert, AZ $1,080 2.9% $1,340 3.9%
42 Henderson, NV $1,070 11.5% $1,260 16.7%
42 Virginia Beach, VA $1,070 4.9% $1,220 1.7%
44 Fort Worth, TX $1,060 9.3% $1,330 15.7%
44 Richmond, VA $1,060 5.0% $1,240 3.3%
46 Buffalo, NY $1,050 10.5% $1,420 13.6%
46 Chandler, AZ $1,050 7.1% $1,290 7.5%
48 Chesapeake, VA $1,040 15.6% $1,200 0.0%
48 Salt Lake City, UT $1,040 15.6% $1,350 15.4%
50 St Petersburg, FL $1,010 9.8% $1,520 15.2%
51 Raleigh, NC $1,000 1.0% $1,190 8.2%
52 Jacksonville, FL $970 7.8% $1,100 4.8%
52 Phoenix, AZ $970 14.1% $1,180 9.3%
54 Kansas City, MO $950 11.8% $1,120 14.3%
55 Boise, ID $940 16.0% $1,000 8.7%
56 Las Vegas, NV $930 14.8% $1,130 15.3%
57 Milwaukee, WI $920 15.0% $1,100 17.0%
58 Anchorage, AK $910 4.6% $1,140 -0.9%
58 Fresno, CA $910 11.0% $1,080 9.1%
58 San Antonio, TX $910 8.3% $1,170 13.6%
61 Colorado Springs, CO $900 8.4% $1,120 4.7%
62 Louisville, KY $880 6.0% $1,000 12.4%
62 Mesa, AZ $880 8.6% $1,010 6.3%
64 Corpus Christi, TX $860 2.4% $1,080 3.8%
64 Des Moines, IA $860 8.9% $920 7.0%
66 Baton Rouge, LA $840 6.3% $940 5.6%
66 Omaha, NE $840 6.3% $1,110 13.3%
68 Laredo, TX $830 15.3% $990 16.5%
68 Reno, NV $830 12.2% $1,220 16.2%
68 Rochester, NY $830 15.3% $1,000 14.9%
68 Syracuse, NY $830 0.0% $1,060 11.6%
72 Knoxville, TN $820 15.5% $930 16.3%
72 Norfolk, VA $820 15.5% $950 5.6%
74 Arlington, TX $810 15.7% $1,090 16.0%
75 Cincinnati, OH $800 15.9% $1,080 14.9%
75 Columbus, OH $800 14.3% $1,050 15.4%
75 Winston Salem, NC $800 15.9% $840 15.1%
78 St Louis, MO $790 16.2% $1,130 16.5%
79 Cleveland, OH $780 16.4% $880 15.8%
80 Chattanooga, TN $770 8.5% $810 8.0%
80 Glendale, AZ $770 14.9% $1,000 12.4%
82 Bakersfield, CA $760 11.8% $890 1.1%
83 Lexington, KY $750 -5.1% $910 -2.2%
83 Memphis, TN $750 13.6% $800 14.3%
85 Spokane, WA $740 13.8% $900 9.8%
86 Greensboro, NC $730 10.6% $820 -2.4%
86 Tallahassee, FL $730 15.9% $860 7.5%
88 Oklahoma City, OK $720 14.3% $860 10.3%
89 Augusta, GA $710 9.2% $830 5.1%
89 Lincoln, NE $710 10.9% $960 15.7%
91 Albuquerque, NM $670 6.3% $830 3.8%
91 Indianapolis, IN $670 13.6% $800 15.9%
93 Shreveport, LA $640 12.3% $720 10.8%
94 Detroit, MI $630 14.5% $720 14.3%
94 El Paso, TX $630 1.6% $770 4.1%
94 Tucson, AZ $630 -3.1% $850 0.0%
94 Tulsa, OK $630 6.8% $780 5.4%
98 Lubbock, TX $620 12.7% $770 2.7%
99 Wichita, KS $600 13.2% $770 16.7%
100 Akron, OH $540 0.0% $740 12.1%

 

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