Supporting Assignees in the Now Normal – Post-COVID

In December of 2024, Dwellworks proudly acquired CORT's Destination Services business, expanding our commitment to delivering industry-leading relocation solutions. Read the full press release here. To ensure a seamless transition, we are making the materials previously available on the CORT Destination Services website accessible as valuable resources for our clients and partners.

For more information on Dwellworks Destination Services, please click here.

 

 

In the earliest days of COVID, the outlook for the housing market painted a bleak picture. As the pandemic upended everything from the supply chain to the workplace, it also changed the way that people interact with physical spaces. It drove demand for many different types of space down while unemployment rates soared, hitting a record 14.8% in April 2020. Headlines warned that the pandemic economy could burst the “big-city rent bubble” and there was a great deal of talk about the burden that landlords and property management firms would shoulder. Experts cautioned that the pandemic would quickly lead to unpaid rents, evictions, and revenue-crippling vacancies. No doubt, there have been hardships along the way. But the rental market has remained far more robust than anyone anticipated it would. Although renters did move away from certain expensive urban areas, the rental market across the country has been incredibly active for the most part. This is due largely to federal programs like stimulus payments and unemployment support combined with the flexibility that property managers extended to keep many renters in their apartments. Today, the housing market is experiencing unprecedented challenges with limited inventory and incredible demand. Renters and buyers alike often pay well over the asking price, with bidding wars driving prices up further. This begs the question: How can you support assignees in today’s landscape?

 

What Are Some of the Factors Leading to Increased Demand for Rentals?

Once upon a time, renters had the luxury of taking their time and “thinking it over.” For many, that option no longer exists as the rental market becomes increasingly tight across the U.S. Housing prices are soaring, impacting buyers and renters looking to move as the pandemic eases. Across the board, rent prices increased by 9.2% during the first half of the year, tripling the pre-pandemic pace, and that’s not just in major metropolitan, high-rent urban centers like New York City, San Francisco, or DC. In some parts of the country, rents are getting hiked up by 33%. For example, we have produced rental market alerts for clients with moves to places like Bozeman and Missoula, Montana, both of which are experiencing record-low vacancies and record-high rents. Many landlords and property managers are increasing rents where they can help offset their losses from the COVID eviction moratorium, knowing that demand will support the higher rental rates. And it’s working. Bidding wars — once the norm only for buyers — have become relatively common in the rental market too. What is driving this increased rental demand? There are a variety of factors at play, all combining to create a record-breaking market in many areas.

 

Offices Are Opening Back-Up, Young Adults Are Moving Back Out

Millions of Americans, including 52% of young adults between the ages of 18 and 29, moved in with family members because of the disruptions caused by the pandemic. The number of young adults moving in to live with their parents reached numbers higher than those during the Great Depression. Research from the Current Population Survey suggests that this move was short-lived. It worked out well for younger employees with jobs that went remote. Now that offices are opening back up for at least part of the time, these young employees are moving back out. Many of them have more disposable income at hand due to their ability to save on rent over the past 12+ months, giving them the flexibility to move from units they shared with roommates to single units. They’re also able to opt for upgraded rentals compared to the units they lived in previously.

 

Millions of New Graduates Have Entered the Market

While many college students struggle to make up for what many consider “the lost year,” two graduating classes have hit the job market. This represents nearly five million people, many of whom are employed and moving to live closer to their workplace. A large percentage of these graduates are entering the rental market for the first time, driving demand further during this time of limited supply.

 

College Students Feel More Comfortable Off-Campus

An estimated 25% of college students decided to postpone their education last fall, most choosing to stay at home with family. As the pandemic is seemingly winding down, many students are returning to in-person learning. However, many are opting to rent off-campus apartments because they feel safer than densely populated on-campus dorms. This is creating spikes in demand that spills over into the municipalities surrounding colleges and universities.

 

Homeowners and Property Owners Cashed in on the Hot Market

It’s a hot market and sellers are often closing deals well above asking prices. That has led many property owners to sell the single-family homes that they rented out previously. At the same time, many homeowners looking to cash in on the hot seller’s market are now entering the rental market themselves while they wait for prices to stabilize and/or they figure out where they want to live. 

 

Buying Isn’t an Option

The rental market was born to serve the needs of those who can't compete for buying homes or condos. It's a hot seller's market, with home prices growing by more than 17% in June 2021 compared to the prior year. More than 50% of homes end up selling for more than the asking price. This edges some potential buyers out, particularly with the bidding wars going on. In turn, demand for rentals continues to increase. For assignees, buying won’t necessarily be a viable option depending on the length of the assignment because they might not recoup the purchase price when it comes time to sell.

 

 

About Dwellworks 

Dwellworks is the world’s largest provider of destination-related services and temporary living solutions for the globally mobile workforce and business travelers. We provide business-to-business solutions for Fortune 1000 and emerging companies directly and through their relocation management partners. Whether a company needs to relocate its employees across the country or around the world, we provide a range of support services to help employees and their families transition successfully from their home location to a new destination.   

Dwellworks supports the diversity of our clients’ globally mobile workforce with personalized destination solutions in 16 countries, covering hundreds of major relocation markets. Dwellworks Living, our global furnished temporary living solution, offers corporate housing accommodations for relocation and business travel customers in 125 countries. Our full-service real estate brokerage, Station Cities, supports home rentals, sales, and purchases in the Tri-State New York area and Chicago. Visit our homepage, learn about our services, and read our blogs to learn how we can help with your relocation and business travel needs.