As colleges across the country operate completely or primarily online, fewer and fewer students are living in college towns – which means landlords are charging less rent in those neighborhoods.
A study released Thursday by Zillow found that the average rent in college areas has fallen 1.2 percent since February – while rent has increased 1.4 percent in areas with fewer college students.
“The softening rental market across the country is more stark in college neighborhoods as pandemic-mandated campus closures and opportunities to complete courses online have provided motivation for young people to move back home,” Zillow senior economist Cheryl Young said. “With many leases ending at the end of the summer or the beginning of the fall, we can expect even greater impacts in the months ahead. The good news for rental owners is administrators seem to be itching to bring students back to campus as soon as they can do so safely, so it’s possible this will be a relatively short-term shock to rent prices.”
The Chronicle of Higher Education and Davidson College report that 44 percent of colleges and universities in the United States are operating fully or mostly online for the fall semester, while 27 percent are fully or primarily offering classes in person.
Zillow found that in neighborhoods with a high share of college students, average rent prices were growing 4.7 percent year over year in February. By August, when many students would typically move back near campus, rents were down 0.5 percent from the year before, marking the first time since at least 2017 — the earliest Zillow data is available — in which college-area rents were lower than the previous year. Meanwhile, rents in ZIP codes with a lower share of college students were up 2.6 percent annually.
It is especially pronounced in more expensive areas with a large share of college students. In Boston’s 02115 ZIP code that includes Northeastern University, the average rent is down 7 percent – while rent is down 5 percent around Berkeley in California.