Homeward Migrating Adults Causing a Rental Crisis
“As seen in the Real Estate Reality Column in the San Leandro Times & Castro Valley Forum, written by Carl Medford”
As every bachelor knows, it is cheaper for two to live together than one. Evidently, that reality has hit a wider audience: with the advent of COVID-19, the number of adults who are currently living with parents or grandparents has skyrocketed to an all new high.
According to data released by Zillow, over 2.7 million adults moved “home” in the months of March and April, 2020, bringing the number nationwide to 32 million – a staggering increase of 9.7% from the same period last year. This number represents the largest number of adults living with parents in recorded history.
There are many reasons, including:
- Some lost jobs and can no longer afford to live on their own. Moving home is a way to slash expenses, wait out the current situation and feel safe and secure.
- Fear of infection has driven some to bail out of areas where the virus has higher-than-normal infection rates.
- College and university closings have forced students to head home until the institutes reopen.
- Many planning on moving abroad for jobs or education have been forced to stay locally until other countries open again.
- Others, able to work from home, have taken this as an opportunity to move home simply to be with family during the crisis.
Whatever the reason, the migration is having a devastating effect on a rental housing market. Lillian Dickerson, staff writer for Inman News, states, “Among 18 to 25-year-olds, a 12% decline in individuals living on their own translates into a $726M slash in rent revenue, according to Zillow. That’s 1.4% of the US rental market.”
This paints a grim forecast for residential rentals, already taking it in the chops due to the coronavirus pandemic. Landlords have seen a dramatic increase in late or postponed rent payments and, with current bans on evictions in many regions across the country, are feeling significant pain. While it might be easy to think that rental properties are owned by large corporations who can afford to take a loss, the truth is that a very large percentage of homes for rent in the US belong to mom-and-pop landlords who only own one or two rental properties. For these individuals, the loss of a single month’s rent cuts deep.
With no immediate answers, landlords are hunkering down and looking for ways to weather the crisis. It is a severe storm for sure.
Carl Medford is a licensed Realtor with Keller Williams Realty and a licensed general contractor. This article is sponsored by the Central County Marketing Association.