2021 Has Arrived – Bringing Several Trends in the Rental Market
Like many businesses, the property rental market was turned inside out by the pandemic. Both owners and tenants are waiting to see what 2021 will bring. One thing we can count on is “change.” For those of you who are wondering what the experts across the nation say, here are 6 of the top predictions.
1. Tenants are headed out – some to the suburbs, some even outside city limits. There are several reasons why:
- People are looking for the privacy and space of their own backyard vs. shared amenities.
- Many professionals are now working remotely, so the need to be close to the company has lessened.
- The highly sought convenience to restaurants, shopping and theaters is not as important to people at the moment due to COVID.
2. Investors may find that they must lower their rent to keep tenants in expensive, densely populated areas such as New York or San Francisco. Flattening rents in these cities may help affordability for tenants who have seen rents increase dramatically in preceding years.
3. On the flip side, the demand for rentals located in suburban areas will be a plus for landlords.
4. The U.S. rental market may become more regulated. States from California on the west coast to Massachusetts on the east coast have already extended “temporary” rent control measures into 2021. Local agencies are expected to move hard on rent control, evictions, and other actions.
5. While rent is expected to broadly remain flat or slightly down nationwide during the first half of 2021, some experts say that key markets such as Phoenix, Charlotte, Atlanta, Las Vegas, and Dallas will continue to see a rise in rent prices during the second half of the year.
6. While more U.S. households are currently renters than at any point since 1965, (according to the Pew Research Center), 7 out of 10 renters say they want to buy a home someday. Home purchases are expected to continue, and the ratio of owners to tenants may change. However, as mortgage rates are likely to increase in the last half of 2021, there may a slowdown in home buying and perhaps an increased demand for single-family home rentals. Recovery of the economy is likely to slow, and renting will remain an attractive option for those who are not ready to own.
Of course, while knowledgeable professionals have made these predictions, and we can use their insight to help make decisions, it is essential to remember that they are only predictions. In December 2019, no one could have known that we would experience the global pandemic that wrought so many changes. The key is to neither be alarmed, nor base your decisions solely on predictions, but calmly consider and take the necessary steps to protect your assets.
About Rentals America
Rentals America provides full-service property management for residential rental properties. Our team is completely dedicated to property management and we’re here to help landlords navigate the rental market.
