Within a week of the White House declaring a national emergency over the coronavirus, online searches for rentals and apartments dropped by about 25%. Since then, the rental market—like many other industries—has not caught a break. Everything from spiking COVID-19 cases to job losses, business shutdowns, and more have made people extremely reluctant to move and sign new leases.
When the coronavirus is finally contained and the dust starts to settle, though, what will happen to the rental market?
What Experts Forecast for the Rental Market in the Aftermath of the Coronavirus
As everyone waits to see what the coming months may bring, here’s a look at five expert predictions for the rental market in the wake of COVID-19.
1. The apartment market will take at least 3 to 6 months to bounce back.
Renters may need at least a few months to get back on their feet financially if they lost earnings and/or jobs due to the COVID-19 outbreak.
Even those who may be financially stable in the immediate aftermath of the coronavirus will likely play it safe for a few months, real estate analytics experts say. Many renters will want to wait and see how the chips will fall in terms of jobs, income, and rent prices.
All of that’s expected to make renters reluctant to sign long-term leases until there’s a greater sense of stability. Consequently, experts believe it could take at least six months, following the COVID-19 outbreak, for renters to be financially and/or psychologically ready to move and sign new leases.
2. The terms for leases and renewals may become more flexible and appealing.
With renters’ reluctance to move immediately following COVID-19, landlords and leasing agents are expected to be far more eager to:
- Retain their good tenants: Typically, that means offering more convenient or attractive lease renewal terms.
- Work with tenants: This may mean offering month-to-month leases to those who don’t want to sign long-term leases, as well as providing more flexible payment options for those who’ve lost income due to the coronavirus.
3. Many apartment communities will be scrambling to fill vacancies.
Another consequence of renters pushing pause on apartment hunting and moving is that rental communities will see fewer new leases. Experts say that will create far more vacancies.
The longer it takes the fill those vacancies, the more likely it may be that apartment owners and managers:
- Lay off staff and/or close some amenities until revenue is back on track
- Lower their screening standards, which could create additional problems and risks
- Invest more in marketing to stand out from the competition
- Offer more attractive pricing and deals to appeal to and attract new tenants
4. Rent prices may drop in some areas.
Some highly competitive rental markets—particularly those that may be slower to bounce back after COVID-19—could see apartment prices fall, experts say.
And that’s not all. Apartments in low-demand rental markets could also come with special move-in offers that go beyond the norm as an extra incentive.
The Rental Market After COVID-19: The Bottom Line
No one knows for sure what the leasing market will look like when the coronavirus is finally contained and a sense of normalcy returns. At this point, however, expert predictions bode well for renters, holding the potential for more inventory options, reduced rent prices, and better move-in incentives.
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