The cost of rent has been plummeting in some large American cities since the start of the pandemic.
Rents declined by 11% in San Francisco and 10% in San Jose according to analysis by property management firm RealPage Inc.
In New York, the average rent dropped by an annualized rate of 8%, while Boston and Los Angeles both saw declines of around 5%.
However, that does not seem to be the case in Hawaii.
The trend on the Mainland U.S. appears to be driven by an exodus of workers fleeing high-density neighborhoods in large cities, for suburbs and smaller towns; where they're now working remotely.
University of Hawaii economist Carl Bonham says that while there is not great data on Hawaii's rental market, there so far does not appear to be a major change in local rents.
“Right now we’re not seeing huge declines in rent in any neighborhood,” Bonham said over Zoom.
Bonham, who directs the University of Hawaii Economic Research Organization, noted that the price of a single family home on Oahu has been surging, and that the inventory of available homes has been shrinking. In contrast, the inventory of condos has been growing, indicating lagging consumer interest.
Those trends in the real estate sales market do not seem to be driving significant change in the rental market. Bohnam says that is likely because Hawaii has not seen a major outflow of residents because of the pandemic.
“People aren’t leaving in droves from Hawaii and moving to the mainland which would drive rents down in general,” the economist noted.
However, there is a chance that could change. Hawaii has experienced modest population loss over the past 3 years, with the trend likely to continue in 2020.
Analysis by UHERO predicts that the pandemic recession will accelerate outmigration, resulting in even more people leaving the state over the next several years.
Bonham says could cause the housing market to soften over time.