Frothy rental prices across the nation are showing signs of cooling, recent real estate data show, with the white hot markets of New York City and Washington D.C. offering modest relief to sticker-shocked renters.
In its recent survey of nationwide rent conditions, data from apartment rental site Zumper said that the most expensive markets in the nation saw either flat prices or outright declines—demonstrating evidence of a potential top.
"Among the top ten most expensive rental markets, only one city, Seattle, saw median rent prices for one bedrooms rise this past month, up just a modest 0.5 percent," Zumper wrote. "Several of these rental markets saw falling prices, including in New York and Boston, while both D.C. and Chicago saw even sharper declines of over three percent."
Zumper's National Rent Index showed that prices for a one bedroom apartment rose marginally, by 0.3 percent, across the nation. Yet the cost for a two bedroom unit fell slightly, but is still up more than 2 percent on average since 2015.
However, the data showed more worrisome declines at the micro level of certain cities. The Big Apple's average rent remained relatively flat around $3000 per month for a one bedroom apartment, but showed the sharpest drop of any top 10 U.S. rental market, Zumper added. One bedroom prices are down by more than 7 percent since last year, while two bedrooms have swooned by nearly 8 percent.
Top five cities such as Boston, San Jose and Oakland—the latter two closely linked to Silicon Valley's fortunes—also saw flat to falling prices, according to Zumper.
In the perpetually hot San Francisco area, rents have now fallen for five consecutive months, Zumper data showed. A one bedroom now costs about $3,330 on average, and $4,500 for a two bedroom. "Overall, one bedroom rents in San Francisco end the year down nearly 5 percent from where they were twelve months ago, as Bay Area renters are beginning to see a bit of relief after years of accelerating rent prices," Zumper's study said.
More landlord concessions
The report dovetails with the latest Douglas Elliman rental report for October, which showed New York City rent prices leveling off and inventory on the rise.
During that month, Manhattan apartment rentals rose slightly as more apartments hit the market, but landlords were forced to offer concessions at a record rate, the survey noted.
In the borough of Brooklyn—the city's hippest and most torrid real estate market—signs of a retrenchment appeared more pronounced. Douglas Elliman data revealed that prices there have for the third time in four months, even amid a construction boom that is reshaping the neighborhood's skyline.
Although Brooklyn's average one bedroom rental prices remained stable around $3000 per month, the luxury rental market has plunged by 9.1 percent year over year, Douglas Elliman noted.
The overall Brooklyn market in October "was characterized by more inventory and concessions, as well as a nominal decline in prices," the report said. Days on the market for certain rentals also got longer by three days, to 43 days on average, Douglas Elliman said.