More Moving Out Of City, Chicago Rent Prices Nosedive In 2020

CHICAGO AREA, IL — While rent is on the rise in smaller, more-affordable U.S. cities, many of the country’s largest metropolitan areas and coastal cities saw prices fall rapidly throughout most of 2020, illustrating how the COVID-19 pandemic had a starkly different effect on regional housing markets over the course of the year.

Chicago is among the cities to see the steepest decline in rent prices. In the past year, the cost of rent has decreased by 12.5 percent in the city. Meanwhile, suburban towns closer to the city on Apartment List’s final National Rent Report of 202o, including Oak Park and Arlington Heights, have also seen a dip in rent, while towns farther out have seen increases.

Most suburban towns did not see rents spike, or nosedive, as much as the city.

Since the summer, when there was a dip in suburban rents, things have stayed pretty stable. The Apartment List study showed a 2.2 percent increase in rent in 2020 in Schaumburg, while Arlington Heights saw a 5.2 percent decrease in rent in 2020.

Rob Warnock, co-author of the Apartment List report, said many cities where the job market is competitive, and where there is typically a higher cost of living, saw rent decline for the first time in decades last year, according to a January Chicago Tribune article.

A part of that flip came amid a steady flow of people moving out of the city during the pandemic.

Jenna Weinerman, vice president of marketing for moving concierge app Updater, said for the first time in four years, more people moved out of Chicago than in, according to a Chicago Tribune report last fall.

“We are seeing outbound moves, but those are predominantly renters, or some renters buying in the suburbs,” Maurice Hampton, former president of the Chicago Association of Realtors and CEO of Centered International Realty, told the newspaper last fall. “They’re working remotely, so they look at the fact that you pay what you pay in rent because your work commute was a walk around the block, but now it’s from your bedroom to your living room.”

These "macro conditions," which include remote work, people wanting more space in their homes and job insecurity, have led to these changes, Weinerman said.

Some city landlords have been offering big perks, including up to five months of free rent for new leases, to attract renters, Ericka Rios, cofounder of Downtown Apartment Company, told the Chicago Tribune in January.

Here is a closer look at Apartment List's Chicago-area stats, which look at rent estimates from December 2019 through December 2020 and pull rent stats from the U.S. Census Bureau’s American Community Survey:

CHICAGO

• Median One-Bedroom Rent: $1,086
• Median Two-Bedroom Rent: $1,198
• Year-Over-Year Rent Growth (November 2019 to December 2020): -12.5 percent

OAK PARK

• Median One-Bedroom Rent: $1,137
• Median Two-Bedroom Rent: $1,543
• Year-Over-Year Rent Growth (November 2019 to December 2020): -5.1 percent

ARLINGTON HEIGHTS

• Median One-Bedroom Rent: $1,261
• Median Two-Bedroom Rent: $1,548
• Year-Over-Year Rent Growth (November 2019 to December 2020): -5.2 percent

SCHAUMBURG

• Median One-Bedroom Rent: $1,459
• Median Two-Bedroom Rent: $1,781
• Year-Over-Year Rent Growth (November 2019 to December 2020): 2.2 percent

NAPERVILLE

• Median One-Bedroom Rent: $1,414
• Median Two-Bedroom Rent: $1,770
• Year-Over-Year Rent Growth (November 2019 to December 2020): 2.5 percent

AURORA

• Median One-Bedroom Rent: $943
• Median Two-Bedroom Rent: $1,226
• Year-Over-Year Rent Growth (November 2019 to December 2020): 2.2 percent

LOMBARD

• Median One-Bedroom Rent: $1,302
• Median Two-Bedroom Rent: $1,737
• Year-Over-Year Rent Growth (November 2019 to December 2020): 1.8 percent

Nationwide, the national rent index fell by 1.5 percent after four consecutive months of decreases, according to the report. This marks a significant change from previous years. In 2019, rents increased by 2.2 percent, by 3 percent in 2018, and by 1.4 percent in 2017.

The year started out normally, according to the report. After a typical winter slump, rent prices picked up as the weather and markets started to warm.

However, things changed after the coronavirus pandemic was declared in March. As Americans were told to avoid all nonessential moves, and millions more put moving plans on hold after losing their jobs, national rent prices fell during the summer months — typically a busy season in the rental market when apartments get more expensive rather than less.

“It was really just those three or four months, where Americans were being told that they needed to stay where they were and cancel big travel plans,” Warnock told the Chicago Tribune last month. “And it just flipped the market on its head.”

Expensive coastal cities have taken the biggest hit during the pandemic. Drops in rent prices were also concentrated in principal cities rather than their suburbs, according to the report.

As the most-expensive and most-impacted city in the country, San Francisco leads the pack with a rent decline of 26.7 percent since March. As a result, the median two-bedroom apartment in San Francisco dropped from $3,147 to $2,305.

These are the cities that saw the steepest declines in rent prices during the pandemic:

1. San Francisco, California: 26.7 percent drop
2. Seattle, Washington: 22 percent drop
3. Boston, Massachusetts: 20.6 percent drop
4. New York, New York: 19.9 percent drop
5. Washington, D.C.: 15.3 percent drop
6. San Jose, California: 15.2 percent drop
7. Arlington, Virginia: 14.8 percent drop
8. Oakland, California: 14.2 percent drop
9. Chicago, Illinois: 13.2 percent drop
10. Minneapolis, Minnesota: 12.8 percent drop

Meanwhile, in affordable, midsize cities and suburbs, rent prices saw significant growth throughout the pandemic. In Boise, Idaho, rents have increased nearly 10 percent since March, more than double the growth experienced during the same period last year.

These are the midsize cities that saw the biggest growth in rent prices:

1. Boise, Idaho: 9.7 percent growth
2. Chesapeake, Virginia: 8.8 percent growth
3. Fresno, California: 7.9 percent growth
4. Greensboro, North Carolina: 7.7 percent growth
5. Toledo, Ohio: 7.6 percent growth
6. Albuquerque, New Mexico: 7.1 percent growth
7. Bakersfield, California: 6.9 percent growth
8. Memphis, Tennessee: 6.7 percent growth
9. Riverside, California: 6.6 percent growth
10. Chula Vista, California: 6.5 percent growth

Researchers at Apartment List speculate that as remote work opportunities increase, more-expensive cities may lose their allure as more U.S. employees take advantage of work-from-home arrangements in cities where they can afford more space.

Read the full report on ApartmentList.com