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December 10, 2015

Report: Rent for 1-bedrooms in Philly plummeted in 2015

Philadelphia recorded fourth largest annual drop in the nation

Apartments Rentals
Philadelphia skyline visit Philadelphia Photo by B. Krist / Visit Philadelphia™

The iconic Philadelphia skyline.

In an annual report on more than 1 million active rental listings in the United States, Philadelphia recorded the nation's fourth largest drop in the price of 1-bedroom units.

According to Zumper's National Rent Report, Philadelphia had a - 5.3 percent annual rent change in 1-bedroom listings, with an average price of $1,240.

Overall, Philadelphia ranked 16th in the United States for average 1-bedroom rental price, surprisingly landing one spot behind Baltimore's $1,250, which represented a 13.6 percent increase over 2014. San Francisco led the pack with an average rent of $3,500, followed by New York City at $3,240 and Boston at $2,380.

Cleveland, with an average 1-bedroom rental price of $610, had the largest annual drop in the country at - 10.3 percent. The next biggest drops were Louisville (-6.7 percent) and Columbus (- 6 percent) before Philadelphia, which was followed by Minneapolis (-4.8 percent) and Albuquerque (-4.8 percent).

Cities with the biggest jumps included Oakland (+19 percent), Phoenix (+15.4 percent), Long Beach (+14.3 percent), Sacramento (+14.1 percent) and Baltimore.

Just what the drop in Philadelphia signals has been the subject of speculation lately following a report from Axiometrics, which concluded that the "volatile" market is likely the result of landlords offering concessions to entice renters as a number of multi-family projects begin to enter the market, the Philadelphia Business Journal reports.

Landlords have increasingly turned to incentives such as move-in specials, reduced rates on units, special offers, and even a month free in certain cases.

While analysts have had some concern about whether Philadelphia can absorb the 4,380 new apartments expected to hit the market in the next 36 months, modest job growth and an annual decline in vacancy from 3.6 percent to 2.0 percent have kept the market relatively stable alongside population growth.

Check out the full Zumper report here.