{"id":151188,"date":"2023-04-21T13:32:00","date_gmt":"2023-04-21T19:32:00","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=151188"},"modified":"2024-02-27T09:22:22","modified_gmt":"2024-02-27T16:22:22","slug":"10-markets-where-rent-is-falling","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/10-markets-where-rent-is-falling","title":{"rendered":"Rent Prices In These 10 Markets Are Falling The Quickest"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC5866612208\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">Median asking rents are beginning to dip in many markets, according to new&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/redfin-rental-report-march-2023\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">data<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;from Redfin, a turnaround from the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/redfin-rental-report-may-2022\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">skyrocketing rent prices<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;observed last spring. The median national asking rent fell to $1,937 in March, a 0.4% year-over-year decline. Median asking rent prices are lower than they\u2019ve been in over a year, and the days of&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/magazine\/real-estate-news\/renters-facing-bidding-wars\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">bidding wars<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for an apartment are coming to an end in many markets. It\u2019s indicative of a correction from overinflated rent prices that resulted in part from a pandemic-driven demand for more space. But rents are still about 20% higher than they were when the pandemic began.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Why Are Rent Prices Cooling?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">From the supply side, new housing construction has finally caught up to pandemic demand. In 2022, there were more multifamily housing starts with five units or more than in any year since 1986, according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/construction\/nrc\/historical_data\/index.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Census Bureau data<\/span><\/a><span data-preserver-spaces=\"true\">. And the number of completed multifamily buildings with five units or more surged 72% in February, reaching one of the highest levels in decades.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Rental demand is also waning. Due to rapidly-rising rent prices in 2022 and fears of an upcoming recession, renters are discouraged from moving and incentivized to stay in their current leases. And housing affordability issues are causing more older folks to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.wsj.com\/articles\/more-parents-are-moving-in-with-adult-childrenat-younger-ages-a931f3d7\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">move in<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;with their adult children, even before their health declines. More young people are renting with&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.wsj.com\/articles\/inflation-driven-record-rents-mean-more-people-are-piling-in-with-roommates-11666671826\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">roommates<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and parents as well. These factors are causing&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.jchs.harvard.edu\/sites\/default\/files\/media-files\/2023-02\/America%27s%20Rental%20Housing_022423%20market%20update.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rental vacancy rates<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to rise, returning to their long-term average.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/airbnbust-why-it-may-be-time-to-rethink-short-term-rentals\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">short-term rental market<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;paints a similar picture\u2014investors rushed to meet the demand for vacation rentals during the pandemic, and the surplus of properties is leading to increased vacancy rates. That\u2019s true even as demand remains&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.airdna.co\/blog\/2023-us-short-term-rental-outlook-report\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">surprisingly strong<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;amid inflation-strained budgets and recession fears.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Where Are Rent Prices Falling the Most?<\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Austin, Texas (-11%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Chicago, Illinois (-9.2%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">New Orleans, Louisiana (-3%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Birmingham, Alabama (-2.9%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Cincinnati, Ohio (-2.9%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Sacramento, California (-2.8%)&nbsp;<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Las Vegas, Nevada (-2.4%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Atlanta, Georgia (-2.3%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Phoenix, Arizona (-2.1%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Baltimore, Maryland (-2%)<\/span><\/li>\n<\/ol>\n\n\n\n<p><span data-preserver-spaces=\"true\">The largest declines in median asking rent prices were in Austin, where asking rents dropped 11%, and Chicago, where asking rents dropped 9.2% from the previous year. Last May, Austin had the highest year-over-year increase in rent prices, at 48%, according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/redfin-rental-report-may-2022\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Redfin data<\/span><\/a><span data-preserver-spaces=\"true\">. This was a result of tech companies relocating to the area and attracting new high-earning residents at a time when mortgage rates were increasing. In the second quarter of 2022,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.rent.com\/research\/migration-nation-q2-2022\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">lead data<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;began to show renters looking to move out of Austin. Now, rent prices are normalizing in the city due to curbed demand.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Cincinnati saw a similarly significant year-over-year rent increase last May, so rents are normalizing there as well. In Chicago, the rental supply increased during the pandemic as new landlords tried to cash in on high rents, and many chose to rent rather than sell at the tail end as homebuying demand decreased, according to Chicago Redfin real estate agent Dan Close.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Where Are Rents Rising?<\/span><\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Raleigh, North Carolina (16.6%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Cleveland, Ohio (15.3%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Charlotte, North Carolina (13%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Indianapolis, Indiana (10.5%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Nashville, Tennessee (9.6%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Columbus, Ohio (9.4%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Kansas City, Missouri (8.1%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Riverside, California (7.2%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Denver, Colorado (7%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">St. Louis, Missouri (4.2%)<\/span><\/li>\n<\/ol>\n\n\n\n<p><span data-preserver-spaces=\"true\">In some metros, rents just keep rising, but even the 16.6% year-over-year growth in asking rent in Raleigh doesn\u2019t come close to the increases shown in last year\u2019s data. A thriving tech scene in cities like Raleigh, Charlotte, and Nashville continues to bring new residents in droves, keeping rent prices inflated even as new residential buildings are erected.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">At the same time, high home prices and rising interest rates turned many would-be homebuyers into renters. For example, in Denver, skyrocketing home prices in recent years have led to a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/kdvr.com\/news\/data\/denver-is-home-to-exploding-number-of-high-income-renters\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">growing group of high-income renters<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;who were priced out of homeownership.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Jennifer Bowers, a Redfin real estate agent in Nashville, says asking rents are also rising in the city because a huge influx of investors bought properties in the area. This contributed to soaring demand by increasing the competition for starter homes, thereby making it possible for investors to charge top-dollar rents. Investors accounted for 26% of home sales in Tennessee during 2021, according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.pewtrusts.org\/en\/research-and-analysis\/blogs\/stateline\/2022\/07\/22\/investors-bought-a-quarter-of-homes-sold-last-year-driving-up-rents\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Pew Research<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What This Means for Investors<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">This data doesn\u2019t necessarily mean that investors should flock to multifamily investment opportunities in cities like Raleigh and Cleveland. After all, imagine if you had bought a home in Austin last March in an attempt to capture high rents up&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/news\/redfin-rental-report-march-2022\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">38% year-over-year<\/span><\/a><span data-preserver-spaces=\"true\">. A year later, you\u2019d be lowering your asking rent and waiting for an&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.redfin.com\/city\/30818\/TX\/Austin\/housing-market\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">average 16.3% decline<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in year-over-year home values to turn around.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Thinking one step ahead could yield better results. If you can find a market where home values are still relatively low, and rent prices are likely to rise due to projected job growth in the area or overflow from nearby hubs, you\u2019ll be in a better position to reap the rewards of local rent increases.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Still, there\u2019s no crystal ball foretelling the perfect strategy. Real estate and rent prices will always fluctuate, though some markets are more stable than others. Maintaining flexibility and having patience may serve you even better than nailing the perfect timing for your purchase.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_7baf96c1c1f12dc484d0cd57d4f8a167\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_3abb2bbe119c9ef05e5d4975c80eb293\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_901df8ae32544c296c3c78e549dc3128 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/10-markets-where-rent-is-falling&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/10-markets-where-rent-is-falling&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Austin, Texas, continues to lose ground in the rental market, while Raleigh, North Carolina surges. Where should you invest next?<\/p>\n","protected":false},"author":613615,"featured_media":151191,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7382,7119],"tags":[],"class_list":["post-151188","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rental-prices","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/151188","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613615"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=151188"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/151188\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/151191"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=151188"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=151188"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=151188"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}