Study finds big drops in apartment rents in Minnesota, Illinois
The multifamily market has been especially resilient during the last 12-plus months. But even this sector has been hit in some ways by the COVID-19 pandemic.
Just look at a recent study by QuoteWizard showing that the average cost of a one-bedroom apartment has dropped in 15 states since the start of the pandemic. Two of those states are in the Midwest, Minnesota and Illinois.
Of course, this means that average rents haven’t fallen in 35 other states, a mark of just how resilient the U.S. apartment market has remained even during the height of the COVID-19 pandemic.
QuoteWizard found that in Minnesota, the average monthly cost of a one-bedroom apartment had fallen to $875 in 2021. That’s down 4 percent from 2019. And in Illinois, the average monthly cost of a one-bedroom apartment dropped to $863, a drop of 6.2 perent when compared to 2019.
In other Midwest states, though, apartment rents continue to rise. In Indiana, the average monthly one-bedroom rent has hit $730 this year, up 4.8 perent from 2019. And Kansas’ average one-bedroom rent of $697 is up 3.1 percent from 2019. Michigan, with its average monthly one-bedroom rent of $766, has also enjoyed a bump of 3.1 percent from 2019. And in Ohio, the monthly average one-bedroom rent of $682 is 3.4 percent higher than two years ago.
Outside the Midwest, Arizona enjoyed a big leap, its average one-bedroom rent of $979 a month a jump of 9.1 percent from 2019. And Massachusetts saw a particularly big drop, its average one-bedroom rent of $1,152 a month a decrease of 11.3 percent from 2019.
As QuoteWizard says, it’s difficult to attribute the change in national rental rates to just one factor, even one as significant as COVID-19. But statistics from iProperty Management show that a stream of renters are leaving cities for suburban locations. iProperty Management has found that since the beginning of the COVID-19 pandemic, the number of open apartments has fallen by 10 percent in suburban areas.
Will this be a long-term trend? CRE professionals that Midwest Real Estate News has spoken to say it won’t be. Yes, some renters might be seeking the open spaces, increased amenities and quiet of suburban multifamily developments today. But once more people in the United States are vaccinated, people return to their offices, live events return and bars and restaurants can open at capacity? Those downtowns suddenly look enticing again. And that might help refill those urban apartment buildings.
And when that happens? You can bet apartment rents in these big cities will rise once again.
