Proptech Firm Bungalow Claims to Have Room-Level Apartment Rent Prices

Proptech firm Bungalow, which calls itself a full-service tech platform for renters, announced its new quarterly series of room rent reports.

Although it might seem superfluous given the number of apartment-level rent information available, it has the potential to provide new ways for owners to consider pricing, occupancy, and other factors.

There’s nothing new in people not within a family group sharing apartments. People may not be able to afford an apartment rent by themselves or might even prefer living with others in an arrangement almost like a miniature boarding house. 

But the common data available to investors, operators, and owners in the multifamily space tends to focus either at the building or until level. All that is fine, but it misses an important dynamic. Renting apartments are people and the way they organize cohabitation can be important. For example, the perception of costs will be based largely on the expense each roommate experiences. In a two-bedroom apartment taken by people not in any kind of familial or romantic relationship, an increase in cost of $100 a month is experienced individually as $50 a month, all else being equal.

According to Bungalow,  the average room rental in the US during the second quarter was $1,177, a 7.29% increase from Q1 2022.

“Summer is typically the busiest moving season where the industry sees a peak in rental prices, but this year’s increase has not been as prominent,” the report said. “For example, the industry is reporting just .5% increase in one-bedroom apartments this season. According to a new report from CoStar Group, the national year over year rent growth was 9.2% in the second quarter of 2022, down from 11.4% in the first quarter.”

Across 12 different cities on which it had data, Bungalow found them to rank from most expensive to least by room rent with San Francisco at the top with $1,579, New York City next at $1,403, and Los Angeles at $1,324.

Others in the over-$1,000-per-room club were San Diego ($1,281); Washington, D.C. ($1,065); Seattle ($1,056); and Boston ($1,043). Portland, Philadelphia, Chicago, Denver, and Dallas ranged from $826 to $943.

Starting rents increased in all the metro areas between the first and second quarters of 2022, with the top four seeing more than a 10% jump and the highest being in San Francisco with 17.75% growth.

The data, especially if it starts to cover a wider set of markets, not only gives an idea of current price impact on individuals but permits a deliberate contrast between overall apartment prices and marketing toward shared apartments and the individual savings that come about.