by Mish

Please consider the Suburban Rent Boom Has Been a Constant Throughout the Pandemic

In the earliest phases of the pandemic, many of the nation's large cities saw sharp rent declines as a subset of renters with newly remote working arrangements moved away from expensive downtown areas that had temporarily lost their vibrancy, in search of more space in the surrounding suburbs. At the same time, widespread job losses also forced many workers to give up leases they could no longer afford. In the time since, big city rent prices have bounced back as employment has rebounded and return to work plans have begun to materialize. But it's still the suburbs that have continued to see the fastest rent growth. 

Analyzing our rent estimates across 39 large and medium-sized metropolitan areas, we find that since March 2020, rents in the suburbs of these metros have grown by 27.2 percent, on average, substantially outpacing the 19.8 percent average rent growth in the core cities that they surround.

Many workers who lost jobs or who no longer needed to be close to an office decided that it was no longer wise to pay a premium for downtown rentals. As existing renters gave up their leases without new renters to take their places, rents in core cities were discounted. This was especially true in the nation’s priciest cities, such as San Francisco, Seattle, Boston, and New York City, all of which saw their median rents plummet by at least 20 percent by the end of 2020.