In the first few months of the pandemic in 2020, renters whose income was impacted fled their apartments in droves, some downsizing to cheaper units, some doubling or tripling up with roommates, and many moving in with families. That drove vacancy rates higher, and rental rates sharply lower as a result.
With financial situations improving for renters that had been impacted by the pandemic, the exact opposite is happening in the D.C.-area rental market now.
“The number of households now is actually higher than the pre-pandemic peak, so that contraction that we saw last year did reverse itself quite quickly,” said Chris Salviati, housing economist at rental search site Apartment List.
Average D.C.-area rents fell as much as 15% at the trough in 2020. The median rental price here is now up 11% just since January, rising significantly faster than during pre-pandemic years. A big reason is that vacant apartments in the Washington area now becoming increasingly scarce.
Apartment List gives users on its site the option of indicating when it is they plan on moving, from just looking to need to move now. It says the share of apartment searchers wanting to move within 30 days has spiked, with many of those searchers likely looking to lock in a lease before rates go even higher.
“Right now we are seeing some of the highest urgency that we’ve actually seen in our data. I think that might drive some of that urgency in terms of folks just wanting to try to see if they can catch one of those deals before they disappear,” Salviati said.
Apartment vacancy rates in the Washington region have now fallen to less than 5%.
One of the reasons D.C. area rents fell so far and so fast in the early months of the pandemic is because rents in this market were so high before the pandemic.
“That pattern that we saw of that steep decline and then that quick bounce back was, I wouldn’t say unique to D.C., but it was something that we were seeing really in the nation’s most expensive markets. That wasn’t happening everywhere,” Salviati said.
The D.C. metro ranks No. 10 among large metros for highest average apartment rents, and with more households competing for fewer apartments, historically low vacancy rates are allowing property managers to be highly selective and raise rental rates, Apartment List said.
Another reason that is driving the increase in demand for rental properties is the for-sale housing market, which continues to see rising prices and low inventory, keeping more potential homebuyers renting for longer.
Apartment List’s full report on rapidly rising apartment rental rates nationwide is online.