"Concessions can often be a leading indicator of a coming price drop, in that landlords will often offer them first before reducing rent," the study noted, adding that property managers offered fewer concessions if rent was decreased. "If owners feel concessions are no longer moving the needle, they'll reduce prices."
In Philadelphia overall, Popov said, the rental market has remained "pretty robust in terms of rent."
"It's getting some more interest from out-of-towners than it has in previous years," he said. "Philadelphia is a really interesting market because it's more affordable than other coastal Mid-Atlantic cities, and I think the New York-to-Philadelphia migration supports the rental market."
Meanwhile, across the U.S., interest on the part of buyers outpaced the number of homes for sale, resulting in a median 10% increase in listing price. Last August, according to a report from realtor.com, about 500,000 more homes were on the market. This summer, compared with last, the number of homes for sale dropped 36% in August, more than the 34% in July.
"Rentals are cooling off, but home prices in premium markets, they're not falling," Popov said. "The truth is, inventory is so low, especially for price points that are interesting or feasible for first-time buyers. There's still so much demand for the price points that first-time buyers need that even a little bit of a reduction in demand, or a big recession, is not wiping that out as a result."
Although potential renters were able to capitalize on concessions ranging from free rent to gifts such as gift cards or flat-screen TVs, some current tenants have struggled to pay rent, Popov said, particularly if they lost their jobs during the pandemic.
"It depends on the market, but I think most of the renegotiations that are happening are not folks trying to score a deal," he said, "but they say, 'I've been furloughed since April, so I can't make it this month, but this is what I can do.'"
Such a deal could present problems in the future, according to Zillow's study, noting that "landlords prefer to offer a concession rather than cut rent and set a precedent that could linger when the market picks back up."
Even so, Popov said, "the bargaining power is shifting somewhat."
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