Should You Rent Now or Wait Until the Fall?
Q: Our 25-year-old daughter lives in a rental with roommates in the Fairmount section of Philadelphia. She has moved twice in the past three years, never using a real estate broker, and plans to move again by Nov. 1. Given the state of apartment rentals right now, when should she begin her search? Would you recommend using a broker this time?
A: In the past, the conventional wisdom for renters this time of year has been to sit tight until the fall, after the leasing frenzy of the summer. But that strategy has lost some of its appeal. Rents have soared nationwide because of a severe shortage of inventory and the vagaries of the pandemic, with prices still climbing in most markets, although at a slower pace than last year.
“You can’t get a time machine, and it’s going to get more expensive the more months you wait,” said Daryl Fairweather, the chief economist at Redfin, the brokerage and real estate search site.
In June, the median asking rent in the country’s 50 largest metros was $2,016, 14.1 percent higher than it was last June, Ms. Fairweather said, and the chronic inventory shortage is likely to keep prices elevated in the near term.
In Philadelphia, the median asking price for a rental apartment in July was $1,920, the highest price so far this year — even though there were hundreds more available listings than in the winter, said Brittany Nettles, a Keller Williams agent and the head of the Nettles & Co. real estate team.
If you have to move now, she said, there may be a bit of wiggle room: According to Multiple Listing Service data, Philadelphia renters negotiated a median monthly rent of $1,795 in July — a $125 discount off the $1,920 median asking price, because landlords are still testing the upper limits of pricing.
But if you’re able to wait until late fall, when demand plummets, “you’ll have some more leverage,” Ms. Nettles said, even if there are fewer listings to choose from.
Competition for the best listings might be reason enough for renters to work with a real estate agent, but consider the costs: In Philadelphia, the landlord often pays the agent’s commission — typically one month’s rent — but not always. So make sure you know who’s picking up the tab before you make a deal.
In New York City, where renters often pay up to 15 percent of the annual lease in broker fees, prices are still surging — the median asking rent in July was $3,600, up 34 percent over last July — so there may actually be some benefit to holding out longer, said Kenny Lee, an economist with the listing website StreetEasy.
“It remains to be seen if asking rents did go up too high over this summer,” Mr. Lee said. “If so, there could be some steep decreases over the fall and winter.”
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