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Real Estate News Roundup: Home Values Soar; Student Rentals Struggle; Where Rent Collection Lags

Jessa Claeys
2 min read
Real Estate News Roundup: Home Values Soar; Student Rentals Struggle; Where Rent Collection Lags

A roundup of news and information from around the web about real estate and personal finance.

Home Values Soar Even Higher in August as Inventory Tightens

Competition among buyers drove rapid sales and pushed values up while the rental market softened

Pressure from this summer’s housing inventory shortage caused U.S. home values to rise sharply in August. They are up 0.7% from July to $256,663, the biggest month-over-month increase in nearly seven years, according to the August Zillow Real Estate Market Report. Home value growth accelerated last month in 48 of the 50 largest markets and was relatively constant in the other two: Birmingham, Alabama, and Richmond, Virginia.

Year over year, home values are up 5.1% in August, the largest annual rise since March 2019. Markets with the highest year-over-year increases in home values were Phoenix (10.5%), San Jose (10.3%), and Seattle (9.2%). The smallest year-over-year gains in home values among major metros were seen in Chicago (1.9%), New York (2.3%), and San Francisco (2.7%).

Additional findings include:

  • Low demand continues to push rents lower—typical rent dropped 0.3% from July to $1,771 in August, the biggest monthly decrease since 2017.
  • Rapid sales further contracted inventory, which is now 29.4% lower than a year ago.

Read the full report here.

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College-Area Rents Are Falling Behind as Schools Move Online

The rental market has softened across the country during the coronavirus pandemic, and especially so in college neighborhoods

Rent prices in college neighborhoods have fallen this summer as colleges and universities across the country have opted for remote learning during the coronavirus pandemic. The drop throughout college areas stands out even in a rental market that has softened across the board since February with rent price growth slowing and landlords offering more concessions.

Data from The Chronicle of Higher Education and Davidson College show 44% of U.S. colleges and universities are operating fully or primarily online for the fall semester, while only 27% are offering classes fully or primarily in person. A new Zillow analysis shows reduced demand in this largely remote environment is having a noticeable impact on rents in ZIP codes in which at least 20% of the population is college students, who make up about 8% of the U.S. rental market in a typical year.

In these neighborhoods with a high share of college students, average rent prices were growing 4.7% year over year in February. By August, when many students would typically move back near campus, rents were down 0.5% from the year before, marking the first time since at least 2017—the earliest Zillow data is available—in which college-area rents were lower than the previous year. Meanwhile, rents in ZIP codes with a lower share of college students were up 2.6% annually.

Other findings include:

  • College-area rents are now the furthest they’ve been below rents everywhere else in several years.
  • Two million more college-age Americans are living with parents or grandparents compared to last year.

Find out more here.

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Rent Collection in Affordable Housing Continues to Lag

Collection rates higher in public housing; tenants staying put in both sectors

Rent collection in affordable housing continues to lag as the pandemic wears on, according to the latest report from Proptech firm MRI Software. Year-over-year collection rates in public housing remain comparatively high. Meanwhile, tenants in both sectors are staying in place.

MRI’s report compiles data from more than 1.5 million affordable and public housing units throughout the U.S. in January-August 2020 and January-August 2019. Analysis comprises both year-over-year and month-over-month comparisons.

Highlights of the findings include:

  • Rent collection in affordable housing in August 2020 reached only 77% of 2019 levels. The July 2020 rate was 76% of July 2019.
  • The rates of rent collection in August 2020 remained relatively strong in public housing, at 94% of August 2019 levels. July 2020’s percentage was 96% of July 2019.
  • Tenants are staying in place. Applications, new admission certifications, and move-out certifications in August 2020 were low compared to August 2019. The same was true of July 2020 compared to July 2019.

Access the full report here.

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.