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## Rent in the 50 Largest US Cities is Cheaper Than a Year Ago
Rent prices in the 50 largest cities in the US have decreased compared to a year ago, with significant drops in southern cities like Austin, Las Vegas, and Phoenix. According to a recent analysis by Realtor.com, the median rent prices in these cities have dropped by 0.5% in the last year. This decrease comes as a relief for renters after experiencing a nearly 25% increase in rent prices from 2020 to 2021.
### Cities with the Largest Year-over-Year Rent Price Decreases
The following cities have seen the largest decreases in rent prices compared to a year ago, based on Realtor.com's data:
1. Las Vegas: -6%
2. Riverside-San Bernardino-Ontario, California: -5.9%
3. Phoenix: -5.7%
4. Austin-Round Rock-Georgetown, Texas: -5.6%
5. San Francisco Bay Area: -4%
6. Tampa-St. Petersburg-Clearwater, Florida: -4%
7. Dallas-Fort Worth-Arlington, Texas: -3.6%
8. Charlotte, North Carolina: -3.5%
9. Sacramento, California: -3.5%
10. Atlanta: -3.1%
11. Denver: -3%
Many of these cities are known for their thriving tech job markets, which have experienced layoffs over the past year. Additionally, the construction of new apartments has contributed to the decrease in rent prices in these areas.
### Rent Price Increases in Midwest and Northeast Cities
While rent prices have gone down in southern cities, they have been steadily rising in many major Midwest and Northeast cities. Columbus, Ohio, saw the highest increase in rent prices with a growth of 9.3%. New York City experienced a 6.8% increase, while Pittsburgh and Boston saw increases of 3.8% and 3.3% respectively. This potentially reflects a stronger labor market in these regions compared to the South and Southwest.
The data for this study was compiled using studio, 1-bedroom, and 2-bedroom unit listings on Realtor.com's website. Some cities were excluded from the study due to limitations in the rental data.
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The decrease in rent prices in the 50 largest US cities presents both challenges and opportunities for new businesses. On one hand, it may be beneficial for startups looking to establish their presence or expand their operations in these cities. Lower rent prices can provide cost savings and allow businesses to allocate resources towards other critical areas such as marketing, hiring, and product development.
For entrepreneurs considering launching their ventures in these cities, the decreased rent prices can be seen as an incentive. It creates a more favorable environment for startups with limited budgets, making it easier to secure affordable office spaces or storefronts. Additionally, the decline in rent may also indicate a softening rental market, meaning landlords may be more willing to negotiate lease terms or offer concessions to attract tenants.
However, it's important for new businesses to consider the larger economic factors contributing to the decrease in rent prices. The layoffs within the thriving tech job markets and the construction of new apartments can impact the local economy, potentially affecting consumer spending and demand for goods and services. Entrepreneurs need to carefully evaluate the long-term sustainability of the rental market in these cities to ensure their business can thrive beyond the initial cost savings on rent.
Similarly, while rent prices have decreased in southern cities, there has been a steady increase in major Midwest and Northeast cities. This trend may reflect a stronger labor market and economic growth in these regions. Entrepreneurs eyeing opportunities in these cities should be prepared to face higher rental costs and potentially fiercer competition.
Ultimately, new businesses must analyze the rent price data alongside other economic indicators and market trends before making decisions on where to establish their operations. It's crucial to strike a balance between affordability and a thriving business ecosystem to increase the chances of long-term success.
Article First Published at: https://www.cnbc.com/2023/07/11/11-us-cities-where-rent-has-fallen-the-most-in-the-last-year.html