OKLAHOMA CITY – Rental concessions on Zillow listings are now nearly twice as common as they were in February, as landlords strive to attract new tenants in a rental market that has softened considerably since the coronavirus pandemic took hold.
However, Oklahoma City ranks lowest in the nation for rental concessions, a situation that Apartment Loan Store attributes to a vacancy rate pegged at less than 5%.
Nationally the share of rental listings that advertise some form of concession rose from 16.2% in February to 30.4% in July, Zillow reported Tuesday. That includes discounts such as free months of rent or parking, a free gift card or waiver of a deposit fee. Only 12.5% of rentals advertised concessions last July.
Free rent for weeks or months was the most frequent concession offered, comprising 90.8% of all promotions advertised across the U.S.; it also was the top concession offered in all but six of the top 50 largest markets. Reduced or waived security deposits constituted 9.1% of all promotions, and gift cards were the next most frequent promotion at 6.6%.
Among the 50 largest metro areas, Oklahoma City ranked last in share of rental listings with concessions in July 2020 at just 6.2%, far behind the national average. Providence, R.I., was 49th, with a rate of 12.4%, double that of Oklahoma City. The share of rental listings with concessions in July 2019 was 5.3% for Oklahoma City, which was still in the bottom five among the metro areas reported.
Landlords appear to be choosing to offer concessions rather than reduce rent to entice tenants to their build- ings, as demand for rentals has waned since February. The median amount of free rent offered is six weeks, which equates to an 11.5% annual discount. For the typical U.S. renter, that would mean about $200 in monthly savings.
According to RentCafé, rentals in Lawton average $662; in Norman, $888; and in Stillwater, $838.
Overall, renters in multi-family units were more likely to receive concessions, with 63% of those renters receiving concessions compared to 59% of renters in other types of rental units. Single-family renters, who tend to be located farther out from urban hubs, saw fewer concessions at 35%, potentially indicating how suburban areas have been less impacted by the economic effects of the virus.
“Before the pandemic, rent growth was accelerating and the nation was seeing concessions dwindle. That trend reversed sharply after the pandemic hit in February,” said Zillow economist Joshua Clark. “In a softer rental market, landlords are trying to push the right button to bring renters into their space... many landlords prefer to offer a concession rather than cut rent and set a precedent that could linger when the market picks back up.”