Tech Cities Dominate List of Most Expensive Rental Markets
Apartment rents are the highest in tech-centric coastal cities, including New York, San Francisco and Boston, which led Zumper’s list of highest-priced rental markets for July.
New York City continues its reign at the top of the list despite posting three months of price declines. The median rent for a one-bedroom apartment in the Big Apple is $4,450. The city’s new FARE Act, which shifts broker fee responsibility to property owners rather than renters, has caused some landlords to raise asking rents, while others are reportedly keeping units off of public platforms and steering renters to broker-exclusive deals. So-called shadow listings can create distorted visibility about true market conditions, according to Zumper.
Driven by a surge in AI-related hiring and stricter return-to-office mandates, the second-place city on Zumper’s list, San Francisco, is experiencing a major rental resurgence and now leads the nation in annual rent growth, with rent for a one-bedroom apartment surging 13.3% year-over-year to $3,400, just shy of the city’s pre-pandemic rate of $2,500. A two-bedroom unit in San Francisco is 16.3% more expensive this summer, which matches August 2019 trends.
Finding housing in San Francisco has become increasingly competitive, and neighborhoods close to the downtown area all saw rents grow in the double digits year-over-year.
“These trends point to a constrained market under mounting pressure from high-earning renters and a city that’s firmly in recovery mode after years of outbound migration," Zumper noted.
Rounding out the top 10 most expensive cities on the list were Boston, Jersey City, San Jose, Miami, Arlington, Washington, Los Angeles and San Diego.
Across the country, the median one-bedroom rent held steady at $1,520 in July, according to Zumper’s National Rent Index. A two-bedroom unit costs a median $1,905 per month, a 0.3% decrease. On a year-over-year basis, one and two-bedroom rents were down 0.7% and 0.3%, respectively. This marks the first time national rents have been flat or declined across the board since Zumper began tracking rent trends and is particularly notable as it comes during what is usually the apartment market’s busiest season.
Source: GlobeSt/ALM