# Notable trends - 2021 shows signs of stabilization in the rental market
The year 2020 led to unprecedented changes in the rental market, mainly as a result of immigration shifts brought about by the COVID-19 epidemic.
Two months to 2021 we see clear signs that these trends have aligned, or even reversed slightly, following the summary in 2020-Q4.
The price difference between more expensive and cheaper cities is growing
We see evidence of a change in this trend when we compare rental prices in the most expensive cities in the country compared to the rest of the country. The chart below shows the difference in percentages between the median price with one bedroom in the eight most expensive cities and the 92 cities left in the follow-up in this rental report. A year ago, the median price of one bedroom in the first eight cities was 120% higher than the bottom 92. That price premium landed in November 2020 at 75%, and stood at 79% as of February 2021. -Q2 and 2020-Q3 showed a rapid decline in price between these two categories, we began to see early signs of a reversal in 2020-Q4, which lasted until 2021.
Prices are rising in New York, San Jose and Boston for the first time since 2020-Q1
Why did this gap start to widen again? This probably reflects a slowdown in tenants abandoning expensive markets and an increase in new tenants moving in. This can be seen in the growth rates of expensive cities in the latest data. Median one-bedroom prices rose last month in three of the country's most expensive cities: New York (+ 4.7%); San Jose (+ 2.3%); And Boston (1.5%). This is the first time we have seen prices grow at a monthly rate in New York since February 2020 - a full year ago. Similarly, prices have not grown in Boston or San Jose since early 2020 or earlier. Meanwhile, cities that became destinations in 2020 because of their relatively low costs, have begun to fade in price growth.
Cheaper neighboring cities were destinations in 2020
Some of the most popular destination cities in 2020 were relatively cheap cities that housed significantly more expensive markets. This has led to pairs of neighboring cities where tenants have rejected the expensive market in favor of the relatively cheap - which has led to lower prices in the expensive market and a cheaper rise. The price effects of this phenomenon are still felt in these markets despite slowing trends. The chart below shows some of the most prominent of these “city couples” and how price trends differ from each other a year ago.
Growth in cheaper cities has waned
Rising prices in the top most popular destination cities, as well as in other destination cities, have slowed since 2020-Q4. The chart below tracks the median price with one bedroom in the top 8 compared to the bottom 92 out of the 100 cities made in this rent report. Prices have been steadily rising throughout the middle of 2020 in cheaper cities, while prices have dropped dramatically in expensive places over the same period. However, these trends slowed considerably at the end of 2020. The median price of one bedroom in the 92 lower cities was only 1.9% higher than a year ago, which is significantly lower than the growth of 5-8% in these cities. In the middle of 2020. A slowdown in these trends has led to an increase in the rental price gap between expensive and cheaper places in recent months.
Rents grew nationally for one-bedroom and two-bedroom units in February, + 2% to $ 1.1 and 1240% to $ 0.9, respectively. Compared to a year ago, the median rent for a one-bedroom apartment rose by 1501%, and the median rent for a two-bedroom apartment rose by 1.8%.
Rents continue to fall significantly in historically expensive coastal cities from a year ago. At the same time, rents in cities that have historically been cheaper throughout the Midwest and Southwest have risen significantly since a year ago.
Notable changes in the last month
1. Detroit, Michigan saw the median one-bedroom rent rise the highest from the month before, up 5.6 percent to $ 950 and ranked as the 70th most expensive rental market.
2. Anchorage, A.C. Was at its second highest monthly growth rate for a median rent of one bedroom at a rate of 5.5%. Anchorage is ranked as the 69th most expensive rental market.
3. Virginia Beach, Virginia and Indianapolis, IN, both saw that the median rent for a one-bedroom apartment climbed 5.3 percent from the previous month, ranking as the 41st and most expensive rental markets, respectively.
4. Boys, ID. And Jacksonville, Florida, expected a 5.2 percent increase in their median one-bedroom rent over the previous month.
5. In Durham, North Carolina there was a 5.1% increase in the median rent of one bedroom to $ 1230 and it was the 37th most expensive rental market.
1. In Newark, New Jersey, the largest decrease in the median rent of one bedroom was compared with the previous month, by 7.4% to $ 1620.
In Cleveland, Ohio, the second-highest monthly drop in the median rent for a one-bedroom apartment was 2 percent. Cleveland is ranked as the 6.1th most expensive market.
In Chicago, Illinois, the highest monthly drop was 3% in the median rent of one bedroom. Chicago is ranked as the 5.2th most expensive rental market.
4. Providence, RI recorded its fourth-largest monthly drop of 4.8% in the median one-bedroom rent.
5. In Des Moines, IA, there was a fifth decrease in the median rent of one bedroom by 4.5% compared to the previous month to $ 850.
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