The Hottest and Coldest Housing Markets in America: Spring 2021
By Joshua Baum, Founder & CEO
The COVID-19 pandemic and recession has had a tremendous impact on all aspects of American life over the past year and housing has been no exception to that. Due to the influx of remote working opportunities, a decline of big city amenities, and a disappearance of many leisure and hospitality jobs, apartment rents in many of the nation’s most expensive housing markets have gone down over the past year. Single family home prices have been a different story though as they have gone up in every metropolitan area due to an increased rate of savings in middle and higher-income households, perpetually low interest rates, and the desire for millennials to move into homeownership, among other reasons. Using data from Zillow, this piece will rank the fastest and slowest growing apartment rental and single-family housing markets nationwide. Additionally, we will rank the most expensive and cheapest housing markets.
Apartment Rental Market
National
The median apartment rent nationwide stood at $1,742 per month in April 2021. This represented a year-over-year increase of 1.5%, slightly lower than the 2.2% rent gain during the previous one year time period, April 2019 to April 2020.
Metros with the Greatest Increase in Rents
The five metropolitan areas that experienced the greatest year-over-year (YOY) gains in median rents were the Boise City-Nampa (13.9%), Riverside-San Bernardino (11.6%), Tucson (10.7%), Spokane-Spokane Valley (10.5%), and Phoenix-Mesa-Scottsdale (10.4%) metros. All of these metropolitan areas are located in the West and it is likely that renters are leaving the high cost cities on the West Coast, many of which experienced drastic drops in rents over the past year as remote working opportunities have become more available.
Metros with the Greatest Decrease in Rents
The five metropolitan areas that saw the greatest decrease in rents year-over-year were the New York-Newark-Jersey City (-8.7%), San Francisco-Oakland-Hayward (-8.6%), San Jose-Sunnyvale-Santa Clara (-6.8%), Boston-Cambridge-Newton (-5.5%), and Seattle-Tacoma-Bellevue (-4.3%) metros. Not so coincidentally, these areas have consistently been among the most expensive metropolitan areas to rent an apartment in and due to the rise of remote work and decline in big city amenities, many renters may have chosen to make the move to cheaper areas such as the high-growth rental markets discussed above and/or moved into homeownership.
Metros with the Most Expensive Rents
To the surprise of very few people, four of the five most expensive metro areas to rent an apartment were located in the supply constrained markets of California. The San Jose-Sunnyvale-Santa Clara MSA ($2,861) in April 2021 was the most expensive metropolitan area to rent in followed by the San Francisco-Oakland-Hayward ($2,828), Oxnard-Ventura-Thousand Oaks ($2,804), New York-Newark-Jersey City ($2,530), and Los Angeles -Long Beach-Anaheim ($2,469) MSAs.
Metros with the Cheapest Rents
Four out of the five cheapest metropolitan areas to rent an apartment in April 2021 were found in the Rust Belt. The cheapest was the Youngstown-Warren-Boardman MSA ($745) and they were followed by the Wichita ($845), Scranton-Wilkes-Barre-Hazleton ($954), Toledo ($963), and Akron ($965) metros.
Single-Family Housing Market
National
The national median sale price for a single-family home stood at $307,445 in March 2021. This represented a year-over-year increase of 13%, significantly higher than the 7.6% gain during the March 2019 to March 2020 time period.
Metros with the Greatest Price Gains
The five metropolitan areas that experienced the greatest year-over-year gains in median sales prices were the Boise City-Nampa (30.4%), Austin-Round Rock-San Marcos (26.3%), Bridgeport-Stamford-Norwalk (24.7%), San Francisco-Oakland-Hayward (23.4%) and the Provo-Orem (19.9%) metros. Similar to the apartment rental market, the MSAs with the greatest rent increases were mostly located in the West and were in regions that have been experiencing an influx of domestic migration from the higher cost coastal cities. The San Francisco-Oakland-Hayward market is an exception though and that is largely due to housing prices going up outside of San Francisco proper as prices in the City by the Bay have actually remained stable over the past year due to an increase in available inventory.
Metros with the Slowest Price Growth
The five metropolitan areas that saw the slowest growth in home prices year-over-year were the Baltimore-Columbia-Towson (1.5%), Cape Coral-Fort Myers (1.6%), Akron (2.4%), Stockton-Lodi-Tracy (4.5%), and Washington, D.C. (7.4%) metros. Accordingly, not a single metropolitan area in America saw negative housing price growth during the March 2020 to March 2021 time period despite a global pandemic that has cost millions of Americans their jobs and hundreds of thousands lives.
Metros with the Highest Prices
The most expensive metros to buy a home largely matched the most expensive places to rent an apartment. The San Jose-Sunnyvale-Santa Clara ($1.31 million) has remained the most expensive area to buy in followed by the San Francisco -Oakland-Hayward ($1.05 million), Los Angeles-Long Beach, Anaheim ($822,433), Honolulu ($805,311), and Oxnard-Ventura-Thousand Oaks ($702,892) metros.
Metros with the Cheapest Prices
The five cheapest metropolitan areas to buy a single-family home were all found in Ohio or upstate New York. The cheapest MSA was once again Toledo ($146,141) and they were followed by the Syracuse ($164,230), Akron ($164,926), Dayton ($172,727), and Rochester ($175,647) metros.
While a variety of factors related to the COVID-19 pandemic and recession have either caused or accelerated trends in the apartment rental and single-family housing markets that have led to the conditions discussed above, it is reasonable to expect the trends to change as the United States moves closer to normalcy. In particular, the nation’s most expensive apartment rental markets, many of which saw significant declines in rents over the past years, can expect to see rents rebound rapidly as young professionals and leisure and hospitality workers return to the big cities to work. We at Hilgard Analytics do not anticipate the end of the office anytime soon and therefore also feel comfortable stating that some of the more exurban and even rural metropolitan areas that have enjoyed rapid acceleration in their apartment rents and single-family housing prices over the past year can expect to cool off in the near future as well.
About Hilgard Analytics
Hilgard Analytics is a socially conscious real estate and economic development research consultancy offering services in residential and commercial real estate, sectoral employment, economic and workforce development, demographic research, and geographic information systems analysis. Email us at Hilgard.Analytics@gmail.com for a quote today!
About the Author
Joshua Baum is a highly respected urban planner with extensive experience analyzing residential and commercial real estate markets, researching climate action strategies, developing economic and workforce development plans, and organizing successful political campaigns. He has made appearances on KPCC (SCPR) 89.3 FM and has been published by Planetizen, the Abundant Housing LA Blog, the Daily Bruin, and Ha’am Jewish Newsmagazine.
Before founding Hilgard Analytics, Joshua worked as a Research Associate at one of California’s most prestigious economic research consulting firms. While attending graduate school, he participated in multiple fellowships such as the Summer Associate program at the Southern California Association of Governments and the Graduate Student Researcher program at the UCLA Lewis Center for Regional Policy Studies. Additionally, Joshua worked on several local political campaigns in Orange County during the 2016 election cycle.
Joshua received a BA in Political Science from UCLA and a M.A. in Urban Planning from the UCLA Luskin School of Public Affairs. He can be followed on Twitter @JoshuaBaum93
