We know that COVID-19 impacted real estate, but in what way? Learn more about the available data and begin your investment journey with The Kitti Sisters.
We see you… It’s been such a wild, busy month already, right?
It’s like we can feel the change in the air. We sing a bit more during our morning coffee, warm hugs with our loved ones, and the sound of our pups running around has something to do with it that we’re obsessed with.
We don’t care if it makes me cliche or sappy or whatever – WE ❤️ SUMMER. We love the warm weather, the school vacation, and the endless fun in the sun. It’s truly a perfect season to just do outdoor activities.
Are ya with us?
And because nearly all of our normalcy was chucked out the door last year, as part of being successful real estate investors as we are, staying on top of important industry information as it’s released, especially as we recover from a major pandemic that’s interrupted the market, is vital right?
How Much Did COVID-19 Change Rental Transactions?
While many real estate investors believe that the COVID-19 pandemic had disastrous effects on the industry, the truth isn’t so straightforward.
To better understand just what’s taking place in multi-family properties, let’s dive into how much did covid-19 change rental transactions! And analyze some of the best and worst MSAs from the third quarter of 2020.
What Is An MSA?
An MSA, or metropolitan statistical area, is a term used to define an urbanized area with a population of at least 50,000 residents consisting of a city and nearby areas that are grouped together socially and economically.
MSAs are used in population analyses to make collecting and understanding statistical data easier. You’ll see their usage more clearly as we dive into the national apartment rent data we’ll be covering in the following sections.
MSAs That Experienced A Decline In Rental Prices In 2020
Out of the 192 MSAs that were featured in the above report, it’s been estimated that rent decreased in 40 of these MSAs, or by 20.8 percent, starting in March 2020 (the beginning of the pandemic) towards the end of the third quarter.
Breaking down this data further, 25 of the 40 MSAs displayed a rent decrease greater than the national average, with 5 of these 40 MSAs experiencing a rent decrease in the double digits. Interestingly enough, California held the most MSAs with the greatest rent decreases.
These areas that showed steep rental pricing drops included Los Angeles, San Francisco, and San Jose.
MSAs That Experienced An Increase In Rental Prices In 2020
The remaining 152 MSAs in the survey experienced a rental price increase since March 2020, with rental price growth rising by 3 percent or more in 76 MSAs, while 3 MSAs achieved double-digit growth.
Whereas the previous category saw rent drop in major MSAs, we saw the most rent growth in smaller MSAs, with the three mentioned above being Poughkeepsie-Newburgh-Middletown, New York; Lake Charles, Louisiana; and Dover, Delaware.
What Does This Data Mean For Rental Markets?
What’s important to note is that we’ve seen the market gradually recover as the pandemic has continued to run its course, with many popular areas seeing a rise in rental prices that dropped steeply during the pandemic. However, the data above demonstrates the impact that COVID-19 had on real estate.
Because COVID resulted in widespread unemployment and greater financial strain for most individuals, areas that are well-known for their higher costs of living experienced the greatest rental decreases as more people began looking for affordable rental options.
Meanwhile, areas that were known for their lower costs of living began to look like a better option for people with a tighter budget who could no longer afford to live in major cities. As a result, this shift over to more affordable locations drove the rental prices up.
But where does that leave us now? As more people get vaccinated and the nation begins to recover, the markets are recovering as well. Big cities that were hit hardest by the pandemic are showing signs of steady rental pricing growth. Additionally, more affordable areas are continuing to maintain their rental pricing growth as well.
Overall, it appears that the market is getting stronger and gaining momentum in anticipation of a speedy recovery ahead.
The Most Important Lesson In Real Estate
The data above isn’t just a helpful way to see how various crises impact the real estate market. It also serves as a valuable reminder: regardless of what happens in the world, people are always going to need a place to live.
Real estate investors will often worry that it’s the “wrong time” to enter the market, especially in unique circumstances like the COVID-19 pandemic. The truth? There is no right or wrong time to make your first investment in multi-family apartment properties.
As the data above shows us, the market will begin to balance itself back out when the economy starts to see growth and progress. Even when rental prices begin to dip, money will still come in when you have properties in your portfolio, and it will continue to stabilize with the economy.
If you always wait for the right opportunity to invest, you’ll never be able to achieve the financial freedom you’re looking for!
Start Your Journey With The Kitti Sisters
Are you ready to invest in multi-family apartment properties but don’t know where to begin? Head to the 🔗 to sign up & learn more about PASSIVE INCOME via Apartment Investing! >>> https://bit.ly/3wqcfdM
Palmy ➕ Nancy
The Kitti Sisters