In the week-ending June 20, executed rents for new leases inched up 0.08% year-over-year, according to RealPage. That marked the first increase in rents since the COVID-19 shut downs began in March.
In fact, at one point in mid-April, executed rents were down as much as 6.4% nationally. Executed rents, which factor in concessions and lease terms, reflect prices in actual signed leases sourced from same-store rent rolls in millions of units running on the RealPage platform.
New lease volumes surged in June, according to RealPage. In the week-ending June 20, total new lease volumes jump 18.6% compared to the same time last year.
Large coastal markets are struggling in mid-June as executed rents dropped by double digits in Boston, New York, Los Angeles, San Jose and Oakland. Rents were also down sharply in Minneapolis/St. Paul and San Francisco.
Things are better in the Sun Belt and Midwest markets, which are driving the pricing rebound and leasing volumes. The largest gains came in Virginia Beach, Memphis, St. Louis, Greensboro, Jacksonville, Columbus, Tampa, Cleveland and Kansas City. Other Sun Belt markets, including Dallas, Fort Worth, Charlotte, Phoenix, Houston, Denver and Las Vegas, recorded flat to modest gains in new lease pricing.
With COVID-19 still raging in many areas of the country, things can change quickly.
“A spike in COVID-19 cases in many of those metros will provide a big test over the next few weeks,” RealPage’s Deputy Chief Economist and Vice President of Asset Optimization Jay Parson wrote. “It’s too early to conclude that new lease pricing has effectively recovered, particularly given continued uncertainty about the state of the economy and the looming expiration of expanded unemployment benefits coming at the end of July.”
New lease pricing fell 3% to 5% in Atlanta, Washington, San Antonio, Philadelphia, Miami, Orlando and Austin, according to RealPage.
While new leasing went through a resurgence in June, renewal pricing dropped back down after it returned to positive territory for much of May. In mid-June, executed renewal rents dropped 1.9% year over year. “The cuts could reflect public sensitivities around renewals, as well as operator priorities focused on high occupancy and longer lease terms,” Parsons wrote.