Coronavirus Updates

5 Markets Where Rents Are Plummeting Due to COVID-19

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With all the craziness surrounding COVID-19 right now, real estate investors are confused about what to do. Which housing markets are getting hit hardest by the virus? Although we’re not all the way through it yet—and we’re not sure how long it’s going to last—we can start to look at some of the recent data to find some answers.

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Today, with the help of our data team over at BPInsights, we want to share with you some data on the five markets where rents are plummeting the most due to COVID-19.

These five cities have been identified as seeing the largest percentage decrease in average monthly rents from the beginning of the year to May 2020. 

5. Manhattan, Kansas

Let’s get to the list. At number five, we have a city nicknamed the Little Apple for its resemblance in name to the Big Apple in New York.

The city? Manhattan, Kansas.

In the decade prior to this year, rents in Manhattan were up 50% over the last 10 years. The average monthly rent in the beginning of 2020 for a unit in Manhattan, Kansas, was $1,134. But over the last five months, the monthly rent has gone down 9%, or $102, to $1,032 average monthly rent as of May 2020.

Related: Should You Adjust Rent for Inflation? Nope. Here’s Why

4. Reston, Virginia

This city was pegged as the best place to live in Virginia in 2018 by Money magazine. We see this evidenced by a 37% rent growth over the last 10 years. But Reston is taking a hit to its average monthly rent in 2020. Rents have dropped by 9.5% in the span of just five months.

That means if you were to rent an average home in Reston at the beginning of the year, it would’ve cost you $2,486 per month in rent. Fast forward five months, that same house would cost $2,251 per month in rent. That’s a $235 decrease. 

close up view of upper level windows and roofs on four row homes

3. North Miami Beach, Florida

Number three on our list as we head to the coast is North Miami Beach, Florida. Prior to this year, North Miami Beach saw a 41% total rent growth over the past decade.

Flip the calendar to 2020, they’re currently experiencing an 11% drop in average monthly rents. Their average monthly rent of $1,933 in January 2020 is now down to $1,720, which is a $213 decrease.

Related: 4 Buying Criteria for Rental Property (& How I Determine a Good Deal)

2. Jersey City, New Jersey

At number two on the list, we have the third-largest city in the New York metropolitan area: Jersey City, New Jersey. Despite having 42% total rent growth in the decade prior, Jersey City is the second most affected by declining rents in 2020.

So far rents in Jersey City have declined by 16.1% over these last few months from an average of $2,582 at the beginning of 2020 to $2,166 in May, a $416 decrease.

1. Coral Gables, Florida

And lastly, with the market most affected by coronavirus, we stay on the East Coast. This market was experiencing a 34% decade-long rent growth prior to the year and has seen that growth almost fully slashed in the wake of the virus.

This market dropped by 25% in average monthly rent over the last five months.

Coral Gables’ average monthly rent to start the year was $2,935 and has dropped to just $2,202 in May. That means if Coral Gables were to keep up this trend for the rest of the year, they would be at a 50% annual rent drop. That means landlords hoping to rent out their properties would only get about half of what they could have gotten toward the end of 2019.

Great for tenants, not so good for landlords.

Now, I do want to put out a quick disclaimer. There are certainly many factors that could be affecting rent changes, whether good or bad, in 2020. Not all of it can be attributed to COVID-19. And who knows, maybe at the end of this pandemic, we’ll see these same cities skyrocket back to normal rental rates and get back to their 10-year trends. Who knows?

If you're looking for more insightful data on historical and future-looking trends in the real estate market, including in your market, be sure to check out the brand-new BPInsights.

Think you know a city that should have made the list?

Let us know in the comments below.

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He is a nationally recognized leader in the real estate education space and has tau...
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    Rick Grubbs Rental Property Investor from Salisbury, NC
    Replied about 1 month ago
    The big question for many of us is whether this can be generalized to our own markets. Here in Salisbury NC we are a bedroom community for Charlotte. Rents are strong and we are even raising them, especially on turnovers. I see a trend where more people are wanting out of the city and into rural areas that are still not "too rural". Think about it. Who wants live in a city that defunds its police department? No one I know!
    Sonja Sevcik
    Replied about 1 month ago
    "Talking to Strangers" by Malcolm Gladwell should be required national reading, right now, so that we can begin to have a great conversation about law enforcement vs. the double negative conversation we are currently having.
    Bryan Letcher from Nashville, Tennessee
    Replied about 1 month ago
    Amen
    Dave Rav from Summerville, SC
    Replied about 1 month ago
    agree!
    Alessandra Verbena from California
    Replied about 1 month ago
    You mean who wants to live in a city that "reforms" their police department? Answer: Everybody! You can read here what "defund the police" means. https://www.brookings.edu/blog/fixgov/2020/06/19/what-does-defund-the-police-mean-and-does-it-have-merit/#:~:text=%E2%80%9CDefund%20the%20police%E2%80%9D%20means%20reallocating,does%20not%20mean%20abolish%20policing.
    Jeff D. Real Estate Investor from Portland, Oregon
    Replied about 1 month ago
    Better yet, increase the pay 25% of teachers AND cops. Because they both have to deal with crap that most of us wouldn't have the patience or nerves to handle on a daily basis. Cutting police dept budgets 15-50% will equal less cops, not less eqpt. Less cops doesn't equal less brutality, more training and oversight equals less brutality. More training and oversight requires more money, not less money. Good luck with defunding. Letting a community police itself is a utopian fantasy. It's working out great at CHOP isn't it? Kum-ba-yah during the day, free-for-all at night.
    Jasmine NA
    Replied about 1 month ago
    Agreed. Why must everything be politicized?
    Chris Schu from las vegas, NV
    Replied about 1 month ago
    Call it whatever you want. End result will be the same - chaos. Property values don't do well when the social and economic environment is in chaos. So, sorry, "everybody" doesn't want this so called "reform".
    Jeffrey Nordin Rental Property Investor from Lodi, California
    Replied about 1 month ago
    Chaos comes from poor management, by definition. 95% of police activity is for nonviolent, nonemergency cases. So decreasing a bloated police department ability to buy armored tanks and instead hire TWO TEACHERS for every cop, or increase the pay by 25% of four teachers instead of some Rambo with a badge, doesn't create chaos. An armed force of non locals arresting brown people at five times the rate for the same drug possession and usage of white people... That creates chaos. ELIMINATE the police might cause chaos. But DEFUND them? Nope, just means more money goes to the actual community members they're supposed to serve.
    Kisha Peterson
    Replied about 1 month ago
    Totally agree
    Carol Kotchek Investor from Superior, CO
    Replied about 1 month ago
    Right on. And by the way to the person who mentioned Democrat Hell Hole, are not the Blue States the economic engine of the USA? I live in one of those state, Colorado. No chaos here, Covid is under control, and the state populous is growing. I could say more but will refrain.
    Steven Ashwood
    Replied about 1 month ago
    You’d do well in the Chop Zone.
    Geo. J. Donaldson Jr.
    Replied about 1 month ago
    Absolutely, dead on!
    Dave Rav from Summerville, SC
    Replied about 1 month ago
    Thanks for the info! Real estate is definitely local. Here's an interesting thought too - as some folks look to move from their current residences to downsize or reduce their housing costs, I surmise this will spike demand for more affordable housing. In essence, this will likely INCREASE rents in this subgroup rental market
    Sonja Sevcik
    Replied about 1 month ago
    But cause the overall average to go down.
    Deryk Harper Residential Real Estate Broker from Alpharetta, Georgia
    Replied about 1 month ago
    Here in Alpharetta GA area ( north metro Atlanta ) market is still very strong. Our business is up about 25% from Jan to May YOY but sales are down about 20%. This is mainly due to lack of inventory on sales as we have a surge in buyer demand. Our typical price range is $1250 to $4000+ and our listings under $2500 are leasing almost instantly to very well qualified tenants. Alpharetta is a tech hub for the SE so I think that is why we are doing so well. Less than 5% of our tenants are behind on rent and half of those are at least making partial payments. Even our higher end rentals are getting a lot of activity from well qualified prospects. They seem to want to rent for now vs buying until they are more certain of the market. We believe we will continue to see an exodus from higher density areas to lower density and from apts/condos/townhomes to single family detached when possible. We also agree people will be more conservative and will look for lowest price acceptable property to rent. This will keep our below median properties filled. Best wishes to everyone out there and PLEASE WEAR A MASK!
    Alex Olson Real Estate Agent from kansas City, MO area
    Replied about 1 month ago
    You mentioned manhattan ks...this is dependant on Kansas State University and their ability to attract students. Enrollment is down. Rents are going down. Similar towns will suffer the same fate.
    Travis Blinkiewicz from Junction City KS / Manhattan, KS
    Replied about 1 month ago
    Alex, I am very curious if BP took this into consideration. I noticed this as early as last fall. This drop in enrollment may present some good buys down the road, as long as enrollment jumps back up later on!
    Hjiorst Fjioords
    Replied about 1 month ago
    I could not help but notice that two of these markets are in Florida, where any fool could see that there has been a Covid-19 spike growing since the governor prematurely re-opened. I believe people will flee the metro areas in states with the highest infection increases. A big factor, though, is perception rather than reality. San Francisco has been showing a slight rent decrease, but all Bay Area Counties have essentially flat-lined their infection rate, while the redder counties have shot up, thus raising the state's overall rate. One more reason renters have left SF: widespread adoption of work-from-home policies have allowed people to say, "Why the hell should I rent in SF when I can live and work cheaper practically anywhere else?"
    Nathan G. Real Estate Broker from Cody, WY
    Replied about 1 month ago
    Florida is similar in size to New York yet they've had 1/10th the number of deaths from COVID. When the news talks about a "spike" and acts like Florida is on fire, check the actual data and keep it in perspective. They're exaggerating everything to keep your eyeballs glued to the tube so they can sell more advertising. It's all a money game.
    Gerald K. Real Estate Investor from Kirkland, Washington
    Replied about 1 month ago
    Here's from John Hopkins University: https://coronavirus.jhu.edu/data/new-cases-50-states/florida
    Malgorzata Sadowska Real Estate Agent from Miami, FL
    Replied about 1 month ago
    I live & work in Coral Gables. Challenging to rent an SFR in the Gables for under $4,500. Those numbers must be referring to condos - which of course is a different segment in our (& any market).
    Chad Benedict
    Replied about 1 month ago
    It feels like the housing market is exploding in my home town of Great Falls MT. And I can't help but wonder if its people moving out of the more densely populated areas. Learning what I can wherever I can, thanks for the article!
    Pasi Musaindapo Lender from Denver, CO
    Replied about 1 month ago
    I wonder is there a chart / graph out there showing rental activity against the COVID19 infection cases? Has anyone seen such a localized chart?
    Ray Slack Investor from Bowie, Maryland
    Replied about 1 month ago
    Most areas the rents have increased due to Covid. The rents in those specific market may have just been ready for a correction even if there was no Covid19. Miami in general has been declining in values and rent prices over the last year months before Covid19 was an issue. Sorry.. and I hate to quote Trump but this is pretty much "Fake News" simply spun for sensationalism.
    Brian Ploszay Investor from Chicago, ILLINOIS
    Replied about 1 month ago
    As a landlord, I am finding that less tenants are moving than normal. That is a big plus. I also find that units are harder to rent, which agrees with this article. What did I do? Reduce the rent until it gets rented. Having a 3 month vacancy is a pure loss. Three negative impacts on NOI these days: decreased rents, increased vacancies and increased defaults. Still, other commercial real estate properties fare worse.
    Jonathan S. Investor from Mc Lean, Virginia
    Replied about 1 month ago
    Coral Gables is a tricky area. The University of Miami takes up a large swath and who knows what the fall semester will look like. Students and professors who were living in CG may not be willing to commit to a lease. The city runs the gamut from Calle Ocho in the north to the affluent south and the less affluent area east of Douglas. The downtown has a number of higher end apartments. Quite a diverse mix. It would probably be better to look at a wider area of Miami-Dade to get a better reading on the state of the rental market. It is still strong in Pinecrest to the south.
    Reinaldo Lopez Rental Property Investor
    Replied about 1 month ago
    Hi every one, hope everybody is safe. I have a friend with a couple apt near Coral Gable, Miami area close to Florida Int University (FIU). I just hear today that school is planning to open partially. Making more students go online due to all the hysteria about COVID-19. I do not have real numbers right now but my daughter will be doing most of her classes online. Between UM and FIU they are a mayor input to the local economy in that area and this will have a profound effect on the rental markets. Also the MIA airport is a good source of employment and right now it is very, very slow. It is hard to make a decision from a 2,300 or lower rent on a 250k to 400K property with high maintenance fee and high taxes. It is well below the 1% rule. Good luck to all.
    Jonathan Barr Rental Property Investor from Los Angeles, CA
    Replied about 1 month ago
    this article is a disappointment for Brandon...towns of probably at-least 300 k of more should be used for this. This information is honestly irrelevant.
    Andrew Jurinka Rental Property Investor from Portland, OR
    Replied about 1 month ago
    I also agree with the last post, this is a disappointing article and give me little faith in BP Insights. This read like a click-bait article and wasn’t particularly useful.
    Alan DeRossett Investor from Thousand Oaks, CA
    Replied about 1 month ago
    Almost everything will change as people flee the cities and remote work from home is now an option for the 4th industrial revolution now happening. This will be a jobless recovery after COVID-19 with more automation preferred over the extra risk of human to human contact larger size properties will be preferred with an end to much lower ceiling designed apartments. newer Smart home enabled rentals with EV Charging are now preferred and the trend will slowly happen to the rest of the country. No one wants the extra risk of living in uncleaned older buildings without filtered air or water. Local food production will shape lifestyle choices. look at the General Plans for the next 25 years in San Jose, Ca or My town of Thousand Oaks ca. have sat in on the 25-year general plan meetings.i now know where to purchase for the next 25 years. after cities spend millions to predict the trends. look for the social distancing values in any new properties you plan to buy people will not pay to live on top of each other with narrow walkways and small dank hallways used by all other doors and windows should open to safe areas. Even fractional ownership models are being used now financed with crowdfunding and blockchain ownership to offer the preferred liquidity. Police will not be defunded but funding will be redirected to other areas like education and mental health and homeless remediation. New Nonlethal force items like the BOLO Wrap or Observation Drones and Knight scope type Robotic video security cams will be funded. Security at the large apartment and hosing projects will also increase rents. with video security and Fog networks for Alerts.
    Donna Mincuzzi
    Replied about 1 month ago
    We have not seen the full extent of the lower rent prices yet because many states have been prohibiting evictions for months due to the virus. Once landlords can evict again, they may start if they haven't been getting rent for months and they did not collect "last" and "security" upfront.
    Margarita Quintero
    Replied about 1 month ago
    I don’t know why they would not pay rent if most of them are getting unemployment
    Albert Ng Rental Property Investor from San Jose, CA
    Replied about 1 month ago
    Because they can get away with it.
    Ruth Webster from Altamonte Springs, Florida
    Replied about 1 month ago
    Margarita:Not everyone is getting unemployment. Just like 2007 many jobs are gone never to return. Those who have jobs are working severely reduced hours. This is a very complicated situation. Working for 8 hours for a whole week when a person wanted to work 40 hours and receiving a paycheck of $66 then counted as “employed” certainly skews the numbers and nothing to brag about. It’s a very sad situation. It’s time to consider each other and realize it could be anyone of us no matter what you own right now.