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Cities With the Biggest Drop in Rent Prices Since COVID

Since the first major outbreak in March 2020, the effects of the COVID-19 pandemic have continued to unfold. One emerging trend is a drop in rent prices in select major metropolitan areas, countering the long term trend of sustained price increases in these locations. Explanations for the recent decline include the rise of remote work and the ability of more affluent renters to relocate. This is especially prevalent among workers in America’s most expensive cities.

Chart1 Rent prices were increasing in tech finance hubs before COVID

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A recent UBS survey of wealthy investors shows that half of the participants intend to move closer to family, and 46 percent may leave cities in favor of less populated areas. Similarly, a recent Gallup poll found that two-thirds of existing remote workers would prefer to do so permanently. As these trends play out, and more rental properties become vacant in high price markets, landlords will likely continue lowering prices to entice potential tenants.

To profile the cities with the biggest drops in rent prices since the outbreak of COVID-19, researchers at Construction Coverage analyzed rental price data from the Zillow Observed Rent Index to calculate the percentage change in rent prices between March and September 2020. Data from the U.S. Census Bureau were utilized to profile income and employment statistics, with attention paid to employment in finance, information, and technology.

While prices have increased since March in a majority of locations, price drops were observed in areas that tend to have more affluent renters and more workers in finance and technology. For example, median household income for renters at the national level is $42,479 versus an average of $56,510 for renters in metros with declining rent prices. And while 14 percent of the nation’s workforce is employed in finance, information, and technology, an average of 18 percent of renters in metros with falling rent prices work in those sectors.

Chart2 Metros with more tech finance workers saw sharper declines in rent

Here are the 15 cities that have recorded the biggest drop in rent prices since the COVID-19 outbreak.

Metros where rent has dropped the most since COVID-19

15 Hawaii Honolulu F9TFKK
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15. Urban Honolulu, HI

  • Percentage change in rent since March: -0.1%
  • Median rent in September 2020: $2,086
  • Median rent in March 2020: $2,089
  • Median household income for renters: $64,573
  • Employment in finance, information, and technology: 11.4%

14 Texas Houston G6NFJ9
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14. Houston-The Woodlands-Sugar Land, TX

  • Percentage change in rent since March: -0.5%
  • Median rent in September 2020: $1,523
  • Median rent in March 2020: $1,531
  • Median household income for renters: $44,328
  • Employment in finance, information, and technology: 12.5%

13 Florida Miami EFTP6W
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13. Miami-Fort Lauderdale-Pompano Beach, FL

  • Percentage change in rent since March: -0.5%
  • Median rent in September 2020: $1,960
  • Median rent in March 2020: $1,970
  • Median household income for renters: $44,612
  • Employment in finance, information, and technology: 14.3%

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12 Minnesota Minneapolis GTFB1H
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12. Minneapolis-St. Paul-Bloomington, MN-WI

  • Percentage change in rent since March: -0.9%
  • Median rent in September 2020: $1,573
  • Median rent in March 2020: $1,587
  • Median household income for renters: $46,718
  • Employment in finance, information, and technology: 17.3%

11 Colorado Denver T0EB17
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11. Denver-Aurora-Lakewood, CO

  • Percentage change in rent since March: -1.0%
  • Median rent in September 2020: $1,762
  • Median rent in March 2020: $1,779
  • Median household income for renters: $57,548
  • Employment in finance, information, and technology: 20.6%

10 Louisiana New Orleans G6NFHY
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10. New Orleans-Metairie, LA

  • Percentage change in rent since March: -1.4%
  • Median rent in September 2020: $1,467
  • Median rent in March 2020: $1,488
  • Median household income for renters: $33,805
  • Employment in finance, information, and technology: 11.4%

09 California Los Angeles DR6D7D
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9. Los Angeles-Long Beach-Anaheim, CA

  • Percentage change in rent since March: -1.4%
  • Median rent in September 2020: $2,610
  • Median rent in March 2020: $2,646
  • Median household income for renters: $56,396
  • Employment in finance, information, and technology: 16.6%

08 Illinois Chicago CPW8T2
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8. Chicago-Naperville-Elgin, IL-IN-WI

  • Percentage change in rent since March: -1.8%
  • Median rent in September 2020: $1,737
  • Median rent in March 2020: $1,769
  • Median household income for renters: $44,814
  • Employment in finance, information, and technology: 16.7%

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07 Texas Austin GJXDYX
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7. Austin-Round Rock-Georgetown, TX

  • Percentage change in rent since March: -1.9%
  • Median rent in September 2020: $1,566
  • Median rent in March 2020: $1,596
  • Median household income for renters: $54,871
  • Employment in finance, information, and technology: 20.5%

06 District of Columbia ETY6HN
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6. Washington-Arlington-Alexandria, DC-VA-MD-WV

  • Percentage change in rent since March: -2.3%
  • Median rent in September 2020: $2,120
  • Median rent in March 2020: $2,171
  • Median household income for renters: $68,791
  • Employment in finance, information, and technology: 23.0%

05 Washington Seattle DAEA6A
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5. Seattle-Tacoma-Bellevue, WA

  • Percentage change in rent since March: -2.9%
  • Median rent in September 2020: $1,961
  • Median rent in March 2020: $2,019
  • Median household income for renters: $62,421
  • Employment in finance, information, and technology: 19.1%

04 California San Jose P9BWCC
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4. San Jose-Sunnyvale-Santa Clara, CA

  • Percentage change in rent since March: -5.3%
  • Median rent in September 2020: $3,103
  • Median rent in March 2020: $3,278
  • Median household income for renters: $96,072
  • Employment in finance, information, and technology: 24.8%

03 Massachusetts Boston EAYKR2
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3. Boston-Cambridge-Newton, MA-NH

  • Percentage change in rent since March: -5.5%
  • Median rent in September 2020: $2,359
  • Median rent in March 2020: $2,497
  • Median household income for renters: $56,498
  • Employment in finance, information, and technology: 21.2%

02 California San Francisco D9XX89
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2. San Francisco-Oakland-Berkeley, CA

  • Percentage change in rent since March: -6.2%
  • Median rent in September 2020: $3,117
  • Median rent in March 2020: $3,323
  • Median household income for renters: $84,041
  • Employment in finance, information, and technology: 26.1%

01 New York New York M3DGHF
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1. New York-Newark-Jersey City, NY-NJ-PA

  • Percentage change in rent since March: -7.2%
  • Median rent in September 2020: $2,624
  • Median rent in March 2020: $2,827
  • Median household income for renters: $55,272
  • Employment in finance, information, and technology: 19.6%

Methodology

Rental price statistics used in this study are from the Zillow Observed Rent Index, covering 105 of the largest metropolitan areas in the United States. To determine the metropolitan areas with the largest drops in rent since the onset of COVID-19, researchers calculated the percentage change in rent between March and September 2020. Metros were ordered by the resulting statistic. In the event of a tie, the metro with the largest absolute change in rent was ranked higher.

Income and employment statistics are from the U.S. Census Bureau’s American Community Survey 1-Year Estimates. Employment in finance, information, and technology was calculated as the share of total employment in the following industry sectors: Information; Finance and insurance; Professional, scientific, and technical services; and Management of companies and enterprises.

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