Rents are declining in markets across the country. A new national apartment rent report from the Apartment List shows that rents have declined in 41 of the top 100 markets in the country since the onset of the pandemic in March. San Francisco, New York and Seattle have seen the steepest decline in rental rates, with 17.8%, 11.6% and 9.9% drops in average rent, respectively. This has cleared all of the rent growth from the last year in those markets.

Last year, rents declined in only four of the top 100 markets, and the rate of decline was .8%. This is nominal compared to the significant rate of decreasing rents in several markets through 2020. The remaining markets saw either flat or improving rents. This year, 26 markets have seen rent growth, compared to 48 markets with rent growth last year. Boise, Toledo, Ohio, and Greensboro, North Carolina all posted rent growth this year, at 9.7%, 8.9% and 7.6% respectively. In several markets the rate of growth surpassed 2019 rent growth. However, most of the markets Apartment List tracked had a slower rate of rent growth compared to last year.

Nationally, rents have decreased 1.4% in 2020. This is the first time that apartment rents have experienced negative growth in the last cycle, although the rate of rent growth had been declining since 2018. The rate of rent decreases seems to be improving. Looking at August to September rent trends, 59 of the top 100 markets had positive month-over-month rent growth.

It is worth noting that the cities with the largest decreases in apartment rental rates are also some of the most expensive in the country. San Jose and Boston round out the list of the top five markets with the most significant rent declines. Not only are these cities some of the most expensive in the country, they are also cities where tech companies drive the jobs market. With long-term office and retail closures, many employees are planning to relocate to alternative and more affordable markets. That could catalyze a longer-term trend in apartment rents and demand. These factors combined with unemployment are contributing to declining rents. In the last month alone, San Francisco rents are down 5.2% and rents in the other five markets are down 2.7% just in the last month.

On the other side of this trend, more affordable mid-sized markets have seen a surge in rent growth. Chesapeake, Virginia, and North Las Vegas round out the top five list for the most rent growth with 6.6% and 5.9% growth respectively. These cities have been a direct beneficiary out outward migration and decreased demand in more expensive markets. If renters take advantage of remote-work environments permanently, renters could begin to make rental decisions independent of their job location.