Rental Market Takes A Winter Chill Pill: Prices Cool As Holiday Season Heats Up

As people turn their attention to holiday festivities, the rental market is entering its slow season and prices are continuing to soften throughout much of the country.

The national median rent for both one- and two-bedroom apartments is down month over month, a continuation of the decline witnessed over the last year and a trend that's expected to continue throughout the winter, according to the Zumper National Rent Report for October.

The national median rent for a one-bedroom unit is $1,505 and for a two-bedroom apartment, it's $1,862, according to the report.  Of the 100 cities on Zumper studied, 59 have one-bedroom medians that are down over last month, 16 are flat and 25 are up month over month.

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"If the current pattern continues, we'll likely see negative year-over-year growth by the end of winter," Zumper CEO Anthemos Georgiades said. "Demand remains soft while a record amount of supply is hitting the market, creating a lot of uncertainty and distress throughout the real estate industry — especially for companies and individuals that invested heavily in multifamily developments over the last five years."

October One-Bedroom Median Rent Prices

Rank	City	Price
1	New York	$4,240
2	Jersey City, New Jersey	$3,130
3	San Francisco	$2,980
4	Boston	$2,960
5	Miami	$2,660
6	San Jose, California	$2,530
7	San Diego	$2,430
8	Los Angeles	$2,400
9	Washington, D.C.	$2,390
10	Arlington, Virginia	$2,290

Source: Zumper

Sun Belt cities such as Phoenix and Austin, Texas, are seeing more significant price drops than other parts of the country as new supply comes online while migration to these areas slows. Phoenix and Austin are the top markets for new supply, so Zumper expects to see further price declines there.

The seven Texas cities on Zumper's list are down month over month, and all but Forth Worth and Arlington are down year over year.

All six Arizona cities on Zumper's list are down year over year except for Gilbert. Phoenix saw month-over-month declines in one-bedroom rents during four of the last six months and year-over-year declines for three consecutive months.

"Year-over-year declines in rent prices are extremely rare and can signal trouble for investors Georgiades said. "Phoenix, in particular, is poised for even more drastic price decreases. Many real estate investors swept into the area at the beginning of the pandemic and are now beginning to offload those rental homes."

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