The housing market isn’t all about location, location, location. As renters are pinching pennies, it may be useful to know that the odds of finding lower rent prices are better in the fall and winter months.
But how can a rental unit be worth less in the fall and winter? It’s not so much that it’s worth less, rather, rental units are more valuable in the spring and summer.
It’s a trend that Orphe Divounguy, a senior economist at Zillow, told FOX31 he sees year after year.
“That’s how the housing market works. People tend to move in the spring, and in the fall and winter it gets quieter and rent slows down,” Divounguy said.
Divounguy said that when the rent increases slow down, you can even find some rent declines.
“There is less competition in the market at that time because fewer people move, and so you get that sweet spot where landlords and property managers are trying to fill their units and there’s just not a lot of competition on the market at that time,” Divounguy said.
Data proves this to be true in general. Rent prices in the U.S. and Denver slow and even decrease in the fall and winter months, according to Zillow data obtained by FOX31.
Divounguy said the price decrease is typical because landlords and property managers are trying to fill their units during a time when there is not a lot of competition on the market.
“Supply also tends to decrease at that time. You don’t have as many units available, but ultimately that big decline in demand usually means the rent growth slows in the fall and winter every year,” Divounguy said.
Part of a bigger housing crisis
Regardless of the season, Denver is among the most expensive rental markets in Colorado.
Rent prices have increased dramatically since the pandemic. Divounguy said rent typically increases some 3-5% each year — before the pandemic, that is.
According to Zillow’s data, year-over-year rent increases peaked in February of 2022 at roughly 16%. The increase has since slowed back to normal, which Divounguy said may be because of the increased building.
Divounguy said wages are still growing, which is good news for renters.
“The increase in supply, the increase in production, especially the multi-family space, is really good news for renters because that increase in supply is helping to moderate rent growth and allow incomes to catch up.”
Housing is like the heartbeat of the U.S. economy, Divounguy said. He said labor productivity growth has a positive impact and is the reason why living standards increase in this country, resulting in higher housing costs. But at the same time, rising housing costs can have a negative impact on productivity growth.
“Rising housing costs prevent workers from moving to where the jobs are. It has a negative impact on productivity growth,” Divounguy said. “So it is really important that we come together as a country to build enough affordable housing for everyone.”
Divounguy said part of the problem is there are many antiquated zoning laws that prevent the construction of more duplexes and triplexes.