As more Americans get vaccinated and the country’s economic outlook improves, there’s a question on the minds of both renters and landlords: What will happen to rent prices once the pandemic ends?
Rents have been on a wild ride over the past year. The rent for a one-bedroom apartment in New York City dropped 18% and in San Francisco fell 24% last year as the pandemic and remote work spurred white-collar professionals to flee big cities. Landlords slashed prices and offered rent-free months to attract new tenants, while existing renters who were out of work struggled to keep up with payments. Meanwhile, rents in smaller cities such as Charlotte, North Carolina, and Boise, Idaho, jumped by as much as 20% as remote workers moved in.
As a professor at the USC Marshall School of Business who studies the rental and housing markets, I’ve been closely following the ups and downs of this unprecedented year. While it’s difficult to make predictions about where we’re headed, here are four trends I’m watching that could have a major impact on rent prices after the pandemic.
HOW MANY PEOPLE CONTINUE TO WORK REMOTELY?
Proximity to jobs has long been one of the main factors driving demand for housing in major cities. But for the more than half of Americans who shifted to working from home last spring, that demand evaporated almost overnight. In New York City, for example, 487% more people left the city last year than in 2019.