The 10 U.S. cities with the biggest rent drops

2. Reno-Sparks, Nev.

Average monthly rent: $753
Annual drop: -13%
Q4 2009 drop: -1.7%

Reno, a casino town dubbed "the biggest little city in the world," was drawing business away from neighboring cities in California just a few years ago. Since 2005, one-fourth of its gaming jobs have disappeared, according to the Los Angeles Times, and the number of people employed in construction dropped by about 12,000, according to BLS figures. The bureau estimates that the unemployment rate here jumped to 12.7% in December, compared with 8.8% a year earlier. The vacancy rate in 2009 was 7.5%.

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3. Las Vegas-Paradise, Nev.

Average monthly rent: $766
Annual drop: -12.4%
Q4 2009 drop: -3.6%

The jobless situation in Las Vegas got worse in 2009. Unemployment soared to 13.1% in December, from 8.7% a year ago, according to BLS figures. As tourism traffic decreased and daily room rates dropped, the leisure and hospitality industry, the area’s major employer, shed 36,000 jobs since December 2007. Accordingly, the apartment vacancy rate here increased to 9.9% last year. In addition to the rental market, the recession also slammed the purchase market. Figures from foreclosure tracker RealtyTrac show the foreclosure rate rose to 12.04% in 2009, the highest level among all U.S. metros.

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4. Tacoma, Wash.

Average monthly rent: $840
Annual drop: -12.3%
Q4 2009 drop: -4.7%

Washington’s third-largest city, Tacoma is an important logistics hub, with railway connections and a major port that provides a gateway to Asia and Alaska. The government is the largest employer in the Tacoma area and continues to add jobs while the construction, manufacturing and information industries shrink. By December, unemployment in Tacoma had jumped to 9.5%, from 7.1% a year earlier, according to BLS estimates. The apartment vacancy rate was 8.9% in 2009.

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5. San Jose-Sunnyvale-Santa Clara, Calif.

Average monthly rent: $1,590
Annual drop: -12.3%
Q4 2009 drop: -2.3%

Renting an apartment in Silicon Valley got a little cheaper as the vacancy rate increased to 5.3% last year. The number of unemployed people reached 103,300, or 11.5% of the population in December, according to the BLS, compared to 7.8% in 2008. This affected the commercial segment as well: According to KGO-TV, the city’s office-space vacancy rate is nearly 25%.

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6. Phoenix-Mesa-Scottsdale, Ariz.

Average monthly rent: $667
Annual drop: -11.2%
Q4 2009 drop: -2%

The Greater Phoenix area, home to companies including U.S. Airways (Tempe) and Go Daddy (Scottsdale), boomed in the last decade but is retreating as the rates of foreclosures (8.03% in 2009) and unemployment soar. BLS figures show the jobless rate increased to 8.2%, or 174,100 people in December, compared with 6.2% the same month in 2008. The metro’s apartment vacancy rate, 11.3%, is the eighth-highest of the 88 areas surveyed by AXIOMetrics. On average, tenants received concessions worth 1.8 months of rent in the fourth quarter. (These concessions were considered when calculating the average monthly rent.)

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7. Salinas, Calif.

Average monthly rent: $1,044
Annual drop: -11.1%
Q4 2009 drop: -4.1%

This farming region in central California, birthplace of author John Steinbeck, typically sees unemployment rise above 10% in the winter when agriculture slows, but in December 2009, the unemployment rate in Salinas shot up to 16.7%, compared with 13.3% a year ago. In addition to farming, the number of hospitality, retail and construction jobs also dropped, reported The Californian. At 5.3%, the apartment vacancy rate was higher than normal but managed to stay lower than in other metros.

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8. Salt Lake City

Average monthly rent: $727
Annual drop: -10.3%
Q4 2009 drop: -3.5%

Salt Lake City, once supported by the mining, railroad and steel industries, had an unemployment rate in December 2009 of 6.2%, compared to 3.8% a year earlier, according to BLS estimates. The vacancy rate last year — 7.6%, compared with 2.9% in 2007 — was affected by apartment construction, including the completion of several large properties, according to a report from Apartment Realty Advisors, an advisory and brokerage firm. More projects are planned this year.

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9. Oakland-Fremont-Hayward, Calif.

Average monthly rent: $1,356
Annual drop: -9.7%
Q4 2009 drop: -1.7%

Companies including Clorox and Kaiser Permanente are headquartered in the Greater Oakland area. Its retail sector has especially suffered during the recession, with taxable sales dropping 27.8% in the fourth quarter of 2008, compared with 8.5% in San Francisco, the San Francisco Business Times reported last month. While the area’s unemployment rate jumped to 10.9% in December, from 7.7% a year earlier, it has eased since peaking in August at 11.6%. The vacancy rate in 2009 rose to 5.3%, but was still low compared with other cities.

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10. Palm Bay-Melbourne-Titusville, Fla.

Average monthly rent: $611
Annual drop: -9.5%
Q4 2009 drop: -1.3%

The Palm Bay market was one of the casualties of the troubled economy in Florida, where the state population shrank in 2009, the first time in decades, according to the University of Florida Bureau of Economic and Business Research. In the past two years, the unemployment rate in the Palm Bay area has skyrocketed, reaching 12.1% in December 2009, nearly three times its 2007 rate. The vacancy rate, at 14.4%, was the highest of the 88 metros surveyed by AXIOMetrics. Landlords gave renters an average 1.5-month discount in the fourth quarter.

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