Apartment Rents Appear to Bottom Out in Major Tech Cities
Pandemic-induced moves by some people away from major cities caused apartment rents in 20 tech markets to fall by an average of 11.6% in March 2021 from February 2020 levels. This is a smaller decline from earlier this year; in January, the average rent was down by 13.2% from February 2020 levels.
The downturn in rents was most pronounced in higher-density cities with concentrations of office-based and tech industry workers who quickly adapted to remote working. Some of these workers subsequently moved out of cities in pursuit of more space and family or lifestyle considerations. Anecdotal evidence suggests that many could return to city living once offices fully reopen.
There are some early signs of a budding recovery of apartment rents in many tech cities, especially those where rents dropped by 10% or more, including Boston, Cambridge, San Francisco, Seattle, and Chicago. If sustained, an apartment market recovery is potentially a leading indicator for office markets awaiting higher tenant space utilization and still struggling with rising supply and low demand.
Apartment Rents Rising in 20 Key Tech Cities
Cumulative rent percent change since February 2020
Source: Apartment List and CBRE Tech Insights Center, March 2021