June Rental Market Data Reveals Dramatic Regional Differences in Market Recovery
Rental Inquiries Vary Drastically Across Major Markets
Rental Concessions Become Commonplace as Landlords Adjust to Coronavirus-Wary Renters
July 23, 2020–Rental Beast is a SaaS platform that simplifies the leasing process with an end-to-end platform, and maintains a highly-accurate updated database of over eight million off-MLS rental properties. Rental Beast’s Data Services Group tracks rental trends within Rental Beast’s 15 active markets, as well as in 13 expansion markets opening within the next 90 days. A complete list of active and expansion markets can be found at the end of this article.
As we enter the second half of 2020, the COVID-19 pandemic continues to impact the rental market on a national scale, despite recent reopening efforts. In this report, we are featuring exclusive data from five major US cities: Atlanta, Boston, Chicago, Miami & Philadelphia. In each location, to gain a picture of market conditions we tracked year-over-year changes in Rental Inquiries and the Rental Concessions landlords offer to tenants.
Rental Inquiries are prospective tenants actively seeking to rent an available property in our database. Rental inquiry volume follows a predictable seasonal pattern. Departures from this pattern serve as powerful, quantifiable early indicators of a shift in the rental marketplace and are more powerful predictors of future transactional activity than traditional rental information, such as average rent.
Rental Beast monitors all inquiries to available listings on the Rental Beast website and listings syndicated to our partner sites including Facebook Marketplace and Realtor.com.
In June, Rental Inquiries varied drastically across markets. Chicago, Atlanta, and Philadelphia recorded YOY Rental Inquiry increases while Boston and Miami continued to report downward trending numbers.
For the second month in a row, Chicago registered positive Rental Inquiry results—a 77% YOY increase. However, it’s important to note that this number represents a significant fall from the 224% YOY increase reported in May.
Philadelphia also had its second consecutive month of positive YOY Rental Inquiries. The city posted a 62% YOY increase in June, a significant improvement from the 24% YOY increase in May.
Richard Demma, Rental Beast’s General Manager for the firm’s MidAtlantic Office, offered insight on Philadelphia’s rising volume of Rental Inquiries. “I am not surprised to see these results. For those looking to leave New York, even for the short-term, Philadelphia is an attractive alternative.”
Atlanta, after logging four consecutive months of declining YOY Rental Inquiries, reported its first month of positive gains—a 28.5% YOY increase.
While these numbers are encouraging, some cities reported decreases in Rental Inquiry volume. For the sixth month in a row, both Boston & Miami registered negative YOY Rental Inquiries.
Boston’s Rental Inquiries reported a 71% YOY decrease. Despite Boston’s steady decline in COVID-19 cases and re-opening schedule, it seems renters remain reticent to call the city home.
Conversely, the recent surge of COVID-19 cases in Florida has delayed Miami’s recovery, with June Rental Inquiries in Miami registering a 50% decline. The Miami market continues to suffer from low levels of tourism, rising unemployment rates in the hospitality industry, and new rounds of pandemic-related closures.
Miami-based real estate expert Dr. Eli Beracha, an Associate Professor and Hollo Research Fellow at Florida International University, provided insight into changes in the Miami market. Beracha suggests that lower Rental Inquiry rates may be attributed to increased unemployment and job insecurity, forcing residents to move in with parents or roommates. He adds that working from home has made tenants reconsider their willingness to pay a premium for workplace proximity and are seeking alternatives further away. Additionally, COVID restrictions have made once popular on-premise amenities less desirable, decreasing rental inquiries for city centers, including the Miami-Dade area.
Rental Concessions are compromises landlords make to original rent terms in the hope of filling a vacancy more quickly. Rental Concessions can include monetary compensation, a discount, or various goods and services.
In June, Atlanta, Boston, and Philadelphia reported large YOY increases in Rental Concessions while Chicago and Miami registered YOY declines.
Atlanta and Boston posted the biggest YOY jumps in Rental Concessions with increases of 194% and 105%, respectively.
Atlanta’s surge of COVID-19 cases and waves of social unrest have resulted in renters searching for a home outside the city center. However, Atlanta schools are still scheduled to open in early August. These factors combined have led landlords to dramatically increase the concessions on vacant units to encourage tenants to finalize their living plans.
With uncertainty surrounding the return of students to Boston’s numerous colleges and universities, landlords remain nervous about the prospect of lower occupancy rates. Accordingly, in June, landlords continued to increase concessions in an attempt to attract renters and alleviate the possible financial pain of a vacant unit. Rental Beast is aware of many landlords who are offering unheard-of rental concessions, including up to two month’s worth of free rent.
Chicago’s June Rental Concessions were down 31% YOY while Miami reported a modest 8.5% decrease in Rental Concessions.
Rental Concessions in Philadelphia remained strong. The city saw a robust 72% YOY increase in June. However, this number represents a significant decrease from the 492% increase in May. Rental Beast’s Demma offered additional commentary on Rental Concession trends in Philadelphia. “It is important to know that Philadelphia’s eviction moratorium is scheduled to end on August 31st. This is weighing heavily on tenant decisions,” said Demma. “If tenants break their leases, landlords must scramble to find new tenants. This dynamic has, in great part, led to the increased concession offers.”