SFR Rents Rise in Q1 But Properties are Staying on the Market Longer
Some of the markets where days on the market are increasing are in the Southeast.
The country’s median national rent for single-family detached homes climbed to $2,395, a big 19.75% leap from the same period two years ago and a 6% rise from that time frame last year, according to a new report by HouseCanary.
But while rents are rising, by the end of the first quarter rental properties were staying on the market for an average of 30.4 days, roughly a 43.4% increase since the same period last year and a 12.6% increase since the last quarter of last year.
Some of the markets where days on the market are increasing are in the Southeast, in some cases noticeably. In New Orleans-Metairie, La., the change represented 175%; Raleigh, N.C., was 167% higher and Durham-Chapel Hill, N.C., was at 140%. The lowest on the list was Riverside-San Bernardino-Ontario, Calif., where the increase was still high but a much lower 89%.
Where did days on the market decrease the most? First place went to Punta Gorda, Fla., at a change of -51%, followed by Albany-Schenectady-Troy, N.Y., at -22%, and then Providence-Warwick, R.I.-Mass., at 0%. Last in this top 10 grouping was Winston-Salem, N.C., at 14%.
Cost of Living a Factor in Rents
How expensive a city is to live is another key indicator for attracting or discouraging renters at a time when so many costs keep going up, including rent. Of the most expensive areas by MSA, three are in California, though Florida’s Naples-Immokalee-Margo Island region is cited for first place at $5,756. That’s followed by California’s San Diego-Carlsbad where rent is $4,941, then Los Angeles-Long Beach-Anaheim at $4.90 and third to San Jose-Sunnyvale-Santa Clara at $4,585. Where to go for least expensive median rental prices is Little Rock-North Little Rock-Conway, Ark., which came in at $1,165.
Some other noteworthy trends:
How the number of bedrooms correlates with price. All rentals saw a year-over-year increase in price with the highest increase being for a one-bedroom, which experienced a 10.8% rise. Lower priced rentals are expected to continue to experience the largest year-over-year price gains as renters look for more affordable options to counter the overall price increases in so many categories.
Days on the market and relationship with price and increased cost. Specifically, for the first quarter of 2023, a one-bedroom median price was $1,511 and was on the market 29 days with a year-over-year price change of 10.8%. In contrast, a five-bedroom cost $3,405 and stayed on the market 33 days and was up almost half of the one-bedroom’s price increase at 5.0%. The report predicts that days on the market trends are not expected to increase as much year after year, but should remain steady or start to go down, albeit slowly.