Apartment rents are falling across the country. Or are they? That depends, with a new report from Yardi Matrix showing that monthly rents are declining faster in major, gateway cities than they are in secondary or tertiary markets.
That’s good news for most of the Midwest’s major cities, as renters, now that many of them are working from home, might flock from more expensive locales such as New York City and San Francisco and instead rent in markets such as Detroit, Indianapolis and Kansas City.
According to Yardi Matrix’s National Multifamily Report, gateway markets such as New York City, Chicago, Boston, San Francisco and Los Angeles saw larger dips in year-over-year apartment rents in November when compared to smaller secondary or tertiary cities.
Overall, multifamily rents declined by 0.5% in November when compared to the same month a year earlier. But more than 100 secondary and tertiary markets are doing better than this national average, according to Yardi Matrix. This includes strong performances from Midwestern cities such as Indianapolis and Kansas City.
Those two markets have seen consistent apartment rent growth during the pandemic, according to the report. That could be because these markets are so much more affordable. Yardi Matrix says that in Chicago the average rent is about 34 percent more than in Kansas City and about 32 percent more expensive than in Indianapolis. According to Yardi Matrix’s numbers, Detroit; South Bend, Indiana; and Toledo, Ohio, also saw year-over-year rent gains in November.
In the gateway cities, Manhattan saw its apartment rents fall 10.2 percent in November when compared to the same month a year earlier. In San Francisco, rents fell 8.6 percent, while in Washington D.C. they dropped 3.9 percent. In Chicago, monthly apartment rents dropped 3.4 percent in November.
Several Midwest cities saw their monthly rents rise. That includes Indianapolis, where they rose 3.9 percent in November, and Kansas City, where rents increased 2.4 percent. In Detroit, apartment rents 4.3 percent in November and in South Bend, they increased by 3.9 percent. In Columbus, Ohio, rents rose by 3.1 percent, while they increased by 2.8 percent in Dayton, Ohio.
