It comes as a given that rents are generally higher for properties with more square footage. But what we have seen during this Pandemic showed us how rents across the board plummeted when people migrated from congested downtowns, to more open suburban plans.
“We’re seeing the impact of workplace flexibility on rents. Renters are more free to pick up and move,” said realtor.com Chief Economist Danielle Hale. “They’re leaving expensive areas. They’re looking for more space and to cut back on expenses and spend less on rent.”Realtor.com
In cities like San Francisco and New York, where high office-usage employment turned to remote work, landlords had a couple choices. Exchange from an increasingly vacant metro property, to one that is seeing higher influx in the suburban areas that offer better social distancing options, or wait it out and pray for people to move back to downtown.
While the first option would have been quite profitable given the timing of things, the latter option is starting to finally see higher rents at least for 1-Bedroom and 2-bedroom units. And that’s because if people can secure more space for themselves in a desirable area with all-time low rates, they will.
“Nationally, monthly rents continued to fall for studios, typically the smallest spaces, according to realtor.com®’s October rental report. However, they’re rising again for one-bedroom units and the more desirable two-bedroom abodes. The latter provides extra space, including an extra bedroom, which some folks are turning into makeshift offices.”
Realtor.com states that the fear of a second lockdown due to a resurgence in COVID-19 cases is triggering people to secure the extra rooms. Looking at the figures, you will notice that rents for studios dipped 0.8% year-over-year. Rents for 1-Bedroom units spiked by 1.1% and 2-Bedrooms are shooting up as well despite still being below the 3.5% annual growth rate prior to the pandemic.
The lure of studio apartments in big cities has faded considering the pandemic has put an unprecedented emphasis on space.