Rents have dropped in the city of Los Angeles, making it the ninth-slowest rent-growing market in the nation, according to a new report from the apartment listing website.
The site’s index uses new lease signings to gauge rent levels, or when a unit is reoccupied after it has been vacant. Compared with a year ago, rents in Los Angeles fell 1.6 percent in May, the survey found. Rents also fell 0.2% in May compared to April.
Rob Warnock, senior researcher at Apartment List, noted that this was a big change from the pandemic, when demand for apartments was high but supply was low. “Even with landlords filling vacancies,” Warnock said, “prices are down 1.6 per cent year-on-year.”
He also pointed to relatively weak demand because of high inflation, low consumer confidence and reluctance to make major capital decisions. “It’s still a historically expensive market and that’s causing demand to pull back,” Warnock added.
According to Apartment List, the most recent median rent in the city of Los Angeles was $1,653 for a one-bedroom unit and $2,183 for a two-bedroom unit. The citywide apartment vacancy rate is 6.1%.
The U.S. city with the fastest year-over-year rent growth was Madison, Wisconsin. According to Apartment List, there is an increase of almost 11% from May 2022 to May 2023. The city with the highest rent growth in Southern California was San Diego, where rents rose 1.3 percent.
Apartment List’s research matched data from another listing site. In a statement on June 9, Redfin announced that asking rent prices in the western U.S. fell 2.1% in May compared to a year ago. Redfin researchers said rents are cooling because more multifamily housing has been built recently, which has increased supply.
In this market, landlords will continue to feel increasing rental pressure, said Chris Gray of Moss & Company, a Sherman Oaks-based firm that manages 15,000 units.
“Landlords are seeing higher insurance costs, higher utility costs, higher labor costs,” he said.
State and city laws requiring more thorough seismic and balcony retrofits also drove up spending. Gray noted that the legacy of the pandemic still haunts him. Tenants who failed to pay rent during the eviction freeze backed up the court calendar, he complained.
