It was interesting to see the impact that coronavirus had on rent prices in the U.S., and at Roomi, we’ve been keeping a close eye on the data we have at our disposal. Contrary to many predictions, we came to realize that the virus did not deter most people from living with near strangers, and actually that renting a room instead of an entire apartment was preferable due to the money saving possibilities.
When you’re trying to decide between living with roommates vs. living alone, cost of living has no doubt come into the equation. Of course, the average cost of renting a room varies pretty substantially between U.S. cities.
Check out this graph that shows Roomi’s exclusive data on the average cost to rent a room in these top 10 cities in the United States.
Why has San Francisco dropped to #3?
We noticed a considerable shuffling in city positions between August and September – with the standout comparison being San Francisco. In August, SF had the most expensive room prices, with an average rent price of $1597 on average. In September, this dropped to $1143 and the city was overtaken in cost by both NYC and Miami.
But why? San Francisco has seen a steady drop in rent prices this year (in July, the average price of a room was as high as $1615). Historically, rent prices in San Fran have only gone up, and this plummet has been a real shock for both renters and landlords. The drop could be a result of what Zumper calls “pandemic pricing”. With major companies like Twitter, Facebook and Square rolling out permanent work-from-home policies, people could be choosing to leave the Bay area to work remotely in more affordable spots.
Rising unemployment levels in the area could also be a factor – many landlords are having to adjust their asking price to get rooms filled, or offering temporary rent reduction to tenants.
The growth of Philadelphia’s rental market
The average monthly price of a room in Philly has dropped from $909 in August to $663 in September. But it seems that this decrease is an anomaly for the city during the past year or two and largely, Philadelphia has been one to watch for rent increases.
Perhaps the decline is another case of pandemic pricing, but if we look at the trends before COVID-19 hit, we’re noticing that some of Philadelphia’s most desirable neighborhoods were only on the up. Forbes has actually pinpointed the area as one of the markets most likely to return to good growth.
A potential reason for the growth could be the fact that Philadelphia has some of the most affordable houses to buy; it has an affordability index of 1 out of 10 – with 10 being the least affordable. More people are choosing to buy places in the area and rent them out for a profit. On top of that, the quality of life in Philadelphia is undoubtedly a good one; it’s been consistently rated as one of the best places to visit in the U.S., and by the looks of things, many of those tourists decide to stick around.
A rising population, increasing job opportunities and low cost of living all come together to make Philadelphia a market to watch.