So, here's a stat that flies in the face of conventional wisdom around what's happening in the residential rental market: "The price of apartments has actually decreased by 2.3% since January."
That's from Dwellsy, a rental platform that lays claim to offering (and tracking) more than 10 million rental properties nationwide, including houses, townhomes, condos, and apartments.
"This year's overall rent increases are coming solely from single-family rentals (SFRs), while apartment home rental prices are actually decreasing," the Los Altos, California-based company says in an Oct. 6 news release. "Dwellsy's data shows that single-family rental prices are up by 15%, driving an overall increase in median rent by 9.6%."
Sizzling summer continues into fall for SFRs
Jonas Bordo, Dwellsy co-founder and CEO, says pandemic-fueled desire for more space and controlled access to their homes has driven new demand for SFRs.
"The supply of these properties is relatively unchanged -- maybe even down, due to the hot single-family sales market -- so rent for this asset type has gone through the roof in 2021," he says in the company release. (We spoke to Bordo in a recent podcast.)
SFR demand is a well-known feature of the COVID-19 economy, reflected both in soaring home sales and that aforementioned rise in rents. That segment also is drawing intense interest from investors of all sizes, from some of the largest to ambitious start-ups. Individual investors also can join in through such real estate stocks as builders like PulteGroup and real estate investment trusts (REITs) like American Homes 4 Rent.
What's happening on a local level
There are, naturally enough, dramatic differences between markets. Dwellsy points to the example of Santa Rosa, California, in Sonoma County near San Francisco. There, SFR prices just jumped 10% in a month while apartment rents dipped 3%.
"This exemplifies the national market trend of single-family homes driving up the overall price of rentals. However, in Los Angeles we noticed the complete opposite trend," the Dwellsy report says. There, demand for apartments has driven the median rental price up 7% so far this year while SFR prices have dipped.
The Dwellsy data includes the change in overall residential rental prices in 440 markets. The cheapest? Bucyrus in central Ohio, where the median rental price in September listings was $474, down 20% year to date. The priciest? Silverthorne, Colorado, with a median September listing price of $3,495, up 25% year to date.
Those areas are both considered "micropolitan," so medians can swing fast. The more typical metropolitan statistical area (MSA) of Santa Cruz-Watsonville, California, led there, with September median listing prices of $3,100 a month, up 24% year to date. The cheapest MSA to rent in right now appears to be Bloomington-Normal, Illinois, at a median $480 a month, down 31% year to date.
The Millionacres bottom line
Dwellsy says it's the largest rental platform in the land. It has the resources and data to provide useful perspective, even when -- or maybe, especially when -- that doesn't jibe with what other perfectly respectable number-crunchers are saying, like RealPage and Apartment Guide, just to name two.
But since all real estate is local and all investment decisions are personal, data like this can help you follow your own hunches, which at this point might well focus on markets where populations are growing, along with rents. Supply and demand, you know. Even in today's turbulent times, that's a dynamic as certain as gravity.