Originally published at: https://boingboing.net/2021/01/21/mapping-the-change-in-apartment-prices-across-pandemic-america.html
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Makes sense, since the cities and regions seeing the biggest slides in rental rates were incredibly over-priced (especially at the high end) to the point of unsustainability pre-pandemic. For most Americans, these places still aren’t cheap by a longshot.
The rate of the slide will slow a bit starting this spring as the vaccine comes on-line, but there’s not going to be a return to the ultra-low rental vacancy rates we’ve seen until at least 2022 (I’ve heard estimates of 2025). Large alpha cities becoming more affordable is a good thing (unless you’re a landlord or developer), but enjoy it while you can.
The people who moved to more affordable places where housing prices are currently rising might be in for a surprise, though. A lot of large corporations are going to start actively cutting compensation for remote-only workers – especially new hires – who live in lower cost of living areas. They’ll wait until after they start re-opening their main offices, but once that happens there’s no way most companies going to continue paying a Bay Area salary to someone working out of Boise.
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The thing that a lot of these analyses leave out is that median rent captures the entire real estate market but doesn’t segment that at all. So while Manhattan has seen record drops for it’s high end luxury apartments, the same can’t be said for the lower end of the market in the other 4 boroughs.
In a StreetEasy analysis of neighborhoods with the lowest rates of Covid infection, affluent areas like SoHo and the Upper East Side in Manhattan saw rents drop 6.7 percent from February to November. But in the neighborhoods hardest hit by the pandemic — predominantly Black, Hispanic and immigrant communities, including Corona in Queens and Kingsbridge in the Bronx — rents fell only 1 percent in the same period.
I don’t think these regional analyses are at all useful without digging deeper into what actually makes up those regions markets.
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Like here in the Hudson Valley. That big blue bubble obscures what should be lots of little bright red ones to the north.
Exactly. The market hasn’t shifted for the average middle class worker, it’s all of the wealthy people who are gobbling up large housing and taking rentals off the market. I don’t even think that the information presented can even capture just how drastic the impact will be on the market as I don’t think it’s even close to leveling off in areas like ours. The prices houses sold for in Mar-Jun or so were simply on the upswing (as indicated in the article).
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It’s all of the wealthy people who are gobbling up large housing and taking rentals off the market.
Totally. The anecdote here is that the usual shopper for a luxury apartment in Manhattan is instead going to Brooklyn or Queens where they can get more space for less money OR buying in Jersey. The demand is forcing pressure downward and not causing any meaningful change for the bottom 1/3 of the market.
I remember my friends asking in April if the pandemic meant they’d finally be able to buy somewhere in Brooklyn. It was clear to me from the start that the pandemic was not enough of a universal crisis to depress prices across the board. That said landlords are still desperate enough such that you can get some concessions and deals here and there but not anything I’d call mind blowing. Unless your idea of mind blowing is a slight discount on a high rise condo in midtown which ugh no thanks.
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Another aspect of this is that a lot of the migration isn’t people surrendering homes that could be more affordable to middle income families, it’s people buying a second home.
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