A recent study has found that Scottsdale is one of the best places for renters for 2023, while a separate report found that the Valley has seen some of the largest year-over-year rent decreases in the nation.
Scottsdale came in at No. 3 on RentCafe’s Best Places for Renters to Live in 2023, coming in just behind Charleston, South Carolina, and Plano, Texas, on a top 50 list that was heavily represented by cities in the Southeastern U.S.
The analysis from RentCafe, a rental listing service operated by Santa Barbara-based pro-tech company Yardi, looked at data for nearly 140 cities in more than 20 metrics in the three larger categories of cost of living and housing, local economy, and quality of life.
Scottsdale came in third for quality of life and was noted in particular for its upscale accommodations, high-end resorts and its cachet as a golf destination. Its schools were also the highest-rated on the list. Scottsdale ranked sixth in the economy category.
“Meanwhile, natural amenities and apartments that are larger than the national average (942 square feet) make it a great spot for both families with young children and young professionals,” RentCafe wrote. “And, the city’s large share of high-end apartments (81.3%) is higher than any of the other cities in our top 10. This is further cemented by more than 80% of apartments being situated in top locations.”
The high marks in the quality of life and economy categories — which accounted for half the weight in the analysis — helped offset Scottsdale’s low ranking in the housing and cost of living category, where Scottsdale ranked No. 42.
Charleston owed its No. 1 spot to rent in the report to its affordable cost of living and its booming economy. Detroit, Michigan was dead last at No. 136.
Separate report: Rental rates falling
When it comes to affordability in Scottsdale, however, things may be getting better. A separate report from Realtor.com indicates that rents were down an average of 5.7% across the Valley in May over the same month last year — the third-largest drop among major metros across the nation.
That’s part of a national trend of rents falling for the first time since the Covid-19 pandemic, and only the Las Vegas and Riverside-San Bernardino-Ontario, California metros had bigger drops.
Realtor.com’s report shows that national rent prices decreased 0.5% year over year in May. The median rent for an apartment with two bedrooms or less was $1,739, down from a high of $1,777 in July 2022 in the 50 largest metropolitan areas. Rents fell $38 from the peak in prices last July.
“The biggest takeaway is it’s a great relief for renters who have faced financial hardships over the years,” Realtor.com economist Jiayi Xu said in a statement. “It opens doors for renters who want to move to new places to explore job opportunities but haven’t wanted to do so because of high relocation costs.”
In the Phoenix-Mesa-Scottsdale metro, the median rent for those sizes of apartments went from $2,433 to $1,663.
“This is yet another sign that rental-driven inflation is likely behind us, even though we may not see this trend in official measures until next year,” Danielle Hale, Realtor.com’s chief economist, said in a statement. “Although still modest, a decline in rents combined with cooling inflation and a still-strong job market is definitely welcome news for households.”
While the decline is a small celebration among renters, it also benefits landlords. Faster rent growth made it challenging for landlords to find qualified tenants, increasing the risk of longer vacancies, according to the study.
However, the rent decline may impact landlords’ profit margins, particularly when considering the still-high inflation that may keep costs elevated.
The report also noted that as more people return to the office, space isn’t as much of a premium as it was in 2020 when workers were remote.
“Smaller units are much cheaper than larger units,” said Xu in a statement. “The affordability drives demand, which drives up the prices.”
Not all 50 metropolitan areas in the survey saw rent prices drop. Columbus, Ohio, saw the largest rental price increase, 9.3% higher than last year. St. Louis; Cincinnati; Indianapolis; and Louisville, Kentucky all saw rent increases of more than 7%.
Another report shows change since pandemic’s start
A separate report from Apartment List was largely in line with Realtor.com’s analysis. Apartment List found June rent prices in Phoenix metro are down 4.2% from what they were a year earlier. They are down 3.4% across Arizona as a whole.
The Apartment List report, however, showed that this year’s drop only slightly offsets the increases of the past few years (last year, rents were up more than 20% in the Phoenix), and found that Phoenix rents are up more than 29% since the start of the Covid-19 pandemic in March 2020.
That report ranks Phoenix as the 48th most expensive city in the U.S. among the nation’s 100 largest cities, with a median rent of $1,456 in June. That’s 6.3% higher than the national median, the report found. That’s just for the city of Phoenix, however, where rents are 7.3% lower than the median across the Valley ($1,570).
Across the Valley, the biggest year-over-year rent drops were in Avondale (down 7.4%) and Goodyear (down 7.1%), while the smallest declines were in Scottsdale (down 2.4%) and Tempe (down 3.9%), according to the Apartment List report.
The Tampa Bay Business Journal contributed to this report.
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