Renters looking to save on their monthly costs might want to consider a move—and fast. According to a new analysis, apartment bargaining power goes up in the winter, especially in colder markets.
Recent data from RealPage, a property management solutions company based outside of Dallas, shows that apartment rents tend to drop toward the end of the year, remaining relatively flat through the next quarter. This gives renters increased bargaining power on their monthly costs.
This leverage is especially apparent in bigger markets with low temperatures—places like Milwaukee, Chicago, Indianapolis and Boston.
“The largely flat rents seen in fourth quarter and first quarter reflect that relatively few renters move in that time period,” said Greg Willett, chief economist at RealPage. “Cold weather makes the moves more difficult, and households are busy during the holiday season.”
In total, only a small portion—about 10 to 20%—of all apartment demand materializes in the first and fourth quarters of the year. According to Willett, this means more competition—and more negotiating power.
“Apartment owners and operators are competing with each other for a relatively small pool of renter prospects in the cold weather months,” he said. “Southern California and most of Florida are the key spots where leasing doesn’t slow much in the fourth and first quarters, but the ability to lease vacant apartments gets much more challenging in the Northeast and Midwest regions of the country.”
The one outlier for this cold weather trend? That’d be Minneapolis. Despite an average January temperature of just 13 degrees, the city’s renters won’t see much bargaining power this winter.
“This is because current apartment occupancy is the tightest of the country’s big metros, and relatively few additional apartments will be completed during the seasonal lull in leasing activity,” Willett explained.
But cold cities aren’t the only spots where renters could see more wiggle room on costs this winter. RealPage also identified a few cities that, thanks to increased apartment construction and improving inventory levels, could offer renters additional leverage as well.
“In most places, the driving influence for this is cold weather,” Willett said. “However, the flow of new product plays a bigger role than weather in places like Austin, Charlotte, Dallas and Seattle.”
Here are the top 12 metros where renters will have the most bargaining power this winter, due to either colder weather conditions, increasing inventory or both.
More Info: forbes.com