Last year’s exodus from big cities was no secret. According to the Federal Reserve Bank of Cleveland, about 56,000 left large urban areas every month in 2020 -- a huge uptick from the 28,000 seen from 2017 to 2019. In November 2020, a shocking 75,000 residents left these cities.
The trend sent rents falling, and in some places, the drops were steep. San Francisco, at one point, saw studio rents down a whopping 34%. New York rents dipped between 16% and 21%, depending on the property type.
Fortunately, it seems those days are gone. Rents have started recovering in recent months, and now, according to a new report from RentCafe, demand for big cities is starting to return.
Just what does that mean for landlords? Let’s dive into the data.
Big-city renting is back
According to the report, overall renting activity has climbed back to pre-pandemic levels, rising 13% in the first half of 2021 alone.
More importantly? Activity is up in all of the country’s 30 biggest cities, with New York leading the pack. The Big Apple saw rental applications jump 95% in the first half of 2021 (when compared to the same period last year). The number of residents moving into the city also surged 209% -- the biggest jump out of all major cities.
Other large metros that were hit hard by the pandemic also saw major bouncebacks. San Francisco’s rent applications jumped 79%, while those in Seattle and San Jose, California, increased 55% and 54%, respectively.
"Although last year’s reports lamented about people fleeing the nation’s largest cities, this year’s rental stats put those worries to rest," said RentCafe’s Nadia Balint. "Renting activity in all of the 30 largest U.S. cities was above that seen during the same period last year and was especially hot in the most popular renter hubs on the coasts."
The numbers of people moving out of big cities are looking positive, too. Only 4% of renters left Washington, D.C., in the first half of 2021. In Denver, it was 10%, and in San Francisco, which was hit particularly hard last year, only 17% of renters left.
The bottom line
The situation looked pretty dire for big-city landlords last year, but finally, it seems things are turning around -- and maybe even surpassing historical norms in some areas. As Balint put it, "Interest in big-city apartments is surging."