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Trending: Landlords in California are reducing rent increases on single-family homes, bringing them below pre-pandemic levels.
Source: Using data from CoreLogic, a trusted spreadsheet analyzed rent indexes for May based on listed asking rates for houses in nine California markets.
Key Takeaways
Although rent prices continue to rise in all nine major California markets, tenants can take comfort in the fact that the rate of increase has slowed compared to the previous year and the pre-pandemic period.
For example, these nine markets experienced an average annual increase of 2% from May 2020, a significant drop from the painful 11.6% increase seen in the preceding 12 months.
Furthermore, this increase is lower than the average annual increase of 4.2% witnessed between 2011 and 2020, a time when the general public had little knowledge about the coronavirus.
California’s pace of rent increases seems favorable when compared to the national average, as rents on homes in the United States rose by 3.4% in the year leading up to May. In other major U.S. markets, Chicago experienced a 6.6% increase, Charlotte saw a 5.9% increase, and both Boston and New York witnessed a 5.7% increase. Notably, Las Vegas rents declined by 1.3% over the course of 12 months.
Details
Let’s examine the rent hikes in the nine California markets in May:
Ventura County: Single-family home rents increased by 0.5% in the past year, compared to an 11.8% increase in the previous 12 months and an average annual increase of 3.8% between 2011 and 2020.
San Francisco County: Rents increased by 0.7% in the past year, with a previous 12-month increase of 11.2% and an average increase of 5.7% from 2011 to 2020.
Inland Empire: Rent prices rose by 1.3% in the past year, following a 13.2% increase in the previous 12 months and an average increase of 3.5% from 2011 to 2020.
Alameda County: Rents increased by 1.8% in the past year, compared to an 8.2% increase in the previous 12 months and an average increase of 4.6% from 2011 to 2020.
Los Angeles County: Rents rose by 2.7% in the past year, following a 10.5% increase in the previous 12 months and an average increase of 4.1% from 2011 to 2020.
Santa Clara County: Rent prices increased by 2.9% in the past year, with a previous 12-month increase of 6.8% and an average increase of 5.1% from 2011 to 2020.
Orange County: Rents rose by 3.2% in the past year, compared to a previous 12-month increase of 14.9% and an average increase of 3.5% from 2011 to 2020.
San Diego County: Rent prices also increased by 3.2% in the past year, following a 16.1% increase in the previous 12 months and an average increase of 3.5% from 2011 to 2020.
Bottom Line
The decrease in rent increases can be attributed to several factors. With more workers returning to offices and students going back to classrooms, renters no longer feel compelled to seek larger living spaces. Additionally, the stagnant population is leading to fewer new households being formed. Furthermore, landlords face increased competition from new apartment complexes and investors who rushed to purchase existing homes in order to capitalize on the high rental rates. As a result, rent prices are becoming more stable.
ApartmentList.com’s analysis shows a statewide decrease in rents by 0.6% in the year leading up to May, compared to a 15.2% increase in the previous 12 months and an average annual gain of 2.3% from 2017 to 2020.
Jonathan Lansner is the Business Columnist for the Southern California News Group. He can be contacted at [email protected].
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