Rental Beast, an end-to-end SaaS leasing platform for real estate agents, maintains a highly accurate updated database with active listings in 14 markets across the U.S. With more than 8 million off-MLS rental properties in its database, Rental Beast is well-positioned to measure the pandemic’s impact on the rental space and is able to aggregate unique and insightful data. In this report, Rental Beast includes year-over-year changes in rental inquiries and the rental concessions being offered to tenants across five cities, including Atlanta, Boston, Chicago, Miami and Philadelphia.
Rental Inquiries
Rental Inquiries are prospective tenants actively seeking to rent an available property in Rental Beast’s database. Rental inquiry volume follows a predictable seasonal pattern, and departures from this pattern serve as powerful, quantifiable early indicators of a shift in the rental marketplace. Rental inquiry data tends to be a more powerful predictor of future transactional activity than traditional rental information, such as average rent.
The continued impact of COVID-19 on public health and economic conditions still decreased housing demand from renters. Atlanta, Miami and Boston registered YOY rental inquiry declines of (-67 percent), (-66 percent), and (-63 percent), respectively. It is important to note, however, that these numbers represent significant gains from April lows, suggesting these cities may be on the way to recovery:
Not all cities saw a decrease in Rental Inquiries. Chicago and Philadelphia registered YOY increases in rental inquiry, recording gains of (224 percent) and (24 percent), respectively.
Rental Beast’s General Manager for the firm’s Chicago office, Kenneth Hawkins, has keen insights into Chicagoland rentals. “The stay-at-home order took effect on March 21 and was lifted on May 29,” said Hawkins. “Now, I believe folks are eager to explore new housing options. Additionally, spring is moving season for our city. Therefore, the increase in rental inquiries may be an indicator that the market is catching up to regular seasonal demand.”
RENTAL CONCESSIONS
Rental concessions are compromises landlords make to original rent terms in the hope of filling a vacancy more quickly. Rental concessions can include a monetary compensation, a discount or an offer of various goods and services.
For the second month in a row, Philadelphia led reported cities with the highest level of rental concessions, with an increase of 492 percent YOY.
In May, rental concessions remained strong in Atlanta (63 percent), Boston (58 percent), Miami (44 percent) and Chicago (8 percent). However, these numbers represent significant decreases from their April highs:
Philadelphia’s growing popularity as a safe haven for New Yorkers has resulted in the expansion of both the sales and rental markets. As home prices continue to rise, hopeful buyers see rentals as a more affordable and accessible option. The City of Brotherly Love also remains friendly to short-term rentals, allowing home-searchers increased flexibility and a means to delay long-term decisions.
In Atlanta, the onset of COVID-19 caused a sharp decrease in sales inventory, triggering a rise in both home prices and rental demand. However, the resulting high rents drove would-be renters and buyers to seek affordability by finding roommates, looking for property further outside the city center, or postponing entry into the market altogether by moving in with family. As a result, worried landlords continued to offer concessions, even as Atlanta relaxes stay at home orders.
Boston remains a COVID-19 epicenter, and, with many Boston colleges and universities unsure of their re-opening plans for the Fall, students are not committing to leases. As a result, Rental Beast saw rental concessions rise for the third month in a row on a YOY basis.
“Offering a concession is a short-term solution for a property owner and that decision will often pay longer term dividends if you build a solid relationship with that tenant,” said Ishay Grinberg, Rental Beast’s founder. “As a landlord myself, I would rather offer a concession to attract a quality tenant and avoid long vacancies in my units.”
Grinberg added, “We will continue to closely watch what happens as states slowly re-open and as rent and eviction moratoriums are lifted. Each move to relax existing safeguards has the potential to greatly impact rental markets.”
For more information, please visit www.rentalbeast.com.
