Online searches for luxury apartment searches are on the rise as rents in some markets decline.
According to Google data analyzed by MyAffordableLuxury.com, the search for luxury apartments is at an all-time high. The website reviewed data from Google AdWords and Google Trends between April 1, 2020, and March 2021.
Luxury apartment searches topped out at 313,000 in January 2021. This is up 46% from January 2020 and nearly double the amount from January 2019. Meanwhile, affordable luxury apartment searches were also at a record high, reaching more than 5,000 searches.
Boston, Washington, D.C. and Dallas were the top three cities, respectively, with the most interest in luxury apartments. New York and Philadelphia rounded out the top five. Houston, Phoenix, Los Angeles, Chicago and San Antonio rounded out the top 10.
The states searching for luxury apartments were dominated by the East Coast. New York, Maryland, New Jersey and Massachusetts were tops, followed by Nevada, Texas, Georgia, Arizona, Virginia and North Carolina.
The biggest question is: Do these searches turn into signed leases?
“I see a ton of activity for luxury rentals in Brooklyn and in Manhattan,” Real Estate Agent Beatrice A. Genco told MyAffordableLuxury.com. “This is because luxury buildings are giving out the best deals.” Tina Baci, Leasing Director with Resis Real Estate said, “After months of people leaving the city, we have seen an enormous amount of renewed interest in luxury rentals.… We are having trouble keeping up with the leads all of a sudden.”
Despite the uptick in luxury searches, housing affordability remains a major concern. Class A multifamily occupancy rates have declined since 2019, according to research from JLL. Meanwhile, Class B and Class C rates have climbed. Some developers are turning their focus from luxury residential communities to affordable housing. “Delivering 400,000 luxury units in 2021 will not solve the affordable housing crisis,” according to JLL. “Across the country, we need the thoughtful development of mixed-income communities.”
Yet, the want for luxury still exists among segments of the renting public. Manhattan luxury rentals saw a nearly 12% decline in price from the second quarter of 2019 to the fourth quarter of 2020, according to Business Insider and StreetEasy data. Prices declined almost 10% in Queens and 7.5% in Brooklyn.
Median rental prices in Manhattan have plummeted since the start of the COVID-19 pandemic. Between February 2020 and February 2021, the median rental price dropped more than 14%, according to DouglasElliman. However, the number of new leases increased more than 112% during the same time, as did listing inventory—up more than 154%. Luxury rentals (top 10%) saw median rental prices drop more than 10% from year-over-year from $8,900 to $7,995. Luxury new leases jumped about 114% from February 2020 to February 2021. Year-over-year trends saw a similar trajectory in Brooklyn and Queens as well, but at lower price points.