“Rent Check” takes a snapshot of the financial challenges tenants face in California’s challenging market for rentals.
Buzz: Rents fell for the second-consecutive month in October with apartment pricing down in 89% of big cities statewide.
Source: My trusty spreadsheet reviewed ApartmentList’s monthly rent estimates in October for 44 large California cities. To estimate what tenants are paying, this rent tracker looks at its own online listings plus landlord pricing data from government sources.
The big picture
In an era of surging rents, a 1.3% dip from September to a monthly median payment of $2,222 may seem modest, but it’s the largest one-month decline in ApartmentList data going back to 2017.
October rent cuts in 39 of 44 big cities are a broadening of discounting. Rent drops were found in just nine cities a year ago.
Let’s not forget rents do remain high.
California’s big-city apartment rents are up 3.5% in a year after gaining 19% in the previous 12 months. The 2022 pace seems more “normal” as rent increased at a 3.2% average annual pace in 2018-19. (By the way, in 2021’s housing craze, rents rose 2.9% in August alone!)
The bottom line
Apartment rents statewide also fell in September, a 0.4% one-month median decline with dips seen in 33 of the 44 cities.
It’s true that autumn isn’t a big season for renters. Yet this two-month dip aligns with industry buzz suggesting that pandemic changes to living arrangements seem to have halted, at least temporarily.
Frenetic apartment hunting is over. Work-from-home and remote schooling is down, cutting needs for larger living quarters and lowering the desirability of rentals far from job centers. Plus, surging rents combined with 2022’s economic uncertainty made living with family or roommates more popular.
To be fair, we should wait until early 2023 to determine if recent rent cuts are simply seasonal swings or the start of a serious downturn.
The caveat
Rent stats vary not only geographically but also by who is counting what, where and when.
Many studies track pricing by management companies for big apartment complexes. Compare that with the Consumer Price Index’s rent index, which is drawn from a survey of consumers living in a wide range of rental arrangements.
Remember, the CPI also covers small landlords who own a chunk of the rental market and often price far differently than giant property owners.
Look at the CPI’s rent inflation measures from across the state for September and you’ll see rising rates of rent hikes.
Riverside and San Bernardino counties: Up 7.9% in a year vs. a 4.3% gain 12 months earlier.
San Diego: Up 7.6% in a year vs. 3.2% 12 months earlier.
Los Angeles and Orange counties: Up 5.3% in a year vs. 1.1% 12 months earlier.
Bay Area: Up 2.3% in a year vs. 0.1% 12 months earlier.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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