Since the housing market has crashed, rentals are big business for savvy investors. People foreclose on their house and need a place to stay; their families are too large for apartments so they have to turn to renting a home. However over the past few months the housing rental market has became saturated with everyone and their brother renting houses and thus, rental rates have dropped due to competition. Some cities have dropped more than others, those cities are:
Seattle, Washington – Currently people are paying around $1,023 to rent a home, this is almost a 14% drop for the year of 2009, which is surprising since Washington is the home to some of the world’s biggest companies, including Amazon.com and Microsoft. The rent drop is most likely due to the unemployment rising to 9%, up from 6% in 2008.
Reno-Sparks, Nevada – Currently residents of “the biggest little city in the world,” are paying only $753 on average for renting a home. This is a decrease of an astounding 13% from what people were paying in 2008. The decrease is most likely due to the economy and jobs have been cut (1/4th of their gaming jobs lost and construction employees dropped by over 10,000.) The unemployment rate is a almost 13% which is huge!
Las Vegas-Paradise, Nevada – People are paying around $766 per month for their homes, which is a drop of 12.4% from 2008. The decrease is due to tourism being down and jobs being lost because of it.
Tacoma, Washington – People in renting in Washington’s third largest city are paying, roughly $840 per month for a home, a 12% drop since 2008. The unemployment rate has skyrocketed to 9.5% which is the main cause of the rental rate drop.
San Jose-Sunnyvale-Santa Clara, California – The average rent is $1,590 (which is more than my mortgage!) The unemployment rate is a staggering 12%, which is over 100,000 people. Rental rates have dropped 12% as well, which I think, in this case, is great! Paying close to $2,000 for a rental seems absurd!
Phoenix-Mesa-Scottsdale, Arizona- Average rental rate is $667 which is a drop of almost 12% since 2008. Over 170,000, or 8%, are unemployed which is the cause of this rent drop. An interesting note is that tenants, on average received almost 2 months of concessions last year. (Meaning, they saved almost enough to pay for 2 additional months.)
Salinas, California – Renting a home will cost you around $1,044 in this California town. Vacancy rates are around 5%, unemployment rates are a devastating 17%. The rental rate drop is one of the lowest drops at 11%.
Salt Lake City, Utah – People are only paying $727 for their homes in one of the best known cities in America. Vacancy rates are a little under 10% which is due to the 6% unemployment rate. Rental rates have only dropped 10%, which is not surprising due to it being a tourist attraction and a place people are looking to move to for work as it holds one of the countries lowest employment rates.
Oakland-Fremont-Hayward, California – Rates are at an average $1,356 a drop of just less than 10% from the previous year, the vacancy rate is only at 5% which is much lower than most other cities. This is due to almost 30% drop in revenue in the retail sector which caused a lot of people to lose their jobs.
Palmbay-Melbourne-Titusville, Florida – The average rate is only $611 here, the lowest of any of our previous cities, surprisingly there was only a 9% drop since the previous year and that only occurred because 12% of the population is unemployed and the vacancy rate is almost at 15%.
As you can tell, unemployment affects everything we do in this country, which is why our economy is still suffering. If companies started hiring again the unemployment rate would decrease, which would increase the rental rates which would increase spending which would bring our economy out of the hole it is in. A few suggestions if you’re looking to help out, if you’re a business owner – hire people! If you know of employment opportunities pass them along to friends and family that might need them. Do every bit you can to encourage people to get out there and find work, companies to hire and to start spending again!
Source: The 10 U.S. Cities with the biggest rent drops