”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.
Buzz: California landlords are shrinking rent increases on single-family homes to below what they sought in pre-pandemic days.
Source: The trusty spreadsheet looked at rent indexes for May based on listed asking rates for houses in nine California markets, calculated by CoreLogic.
Topline
Yes, house rents are still rising in all nine major California markets tracked. But the good news for tenants is that the pace of rent increases is down over the past year and compared with the pre-pandemic norm.
Consider that these nine markets averaged 2% annual increases from May 2020. That’s down from a painful 11.6% during the previous 12 months.
It’s also below the 4.2% average annual increases seen in 2011-2020 — before anyone without an infectious disease degree knew much about a coronavirus
This is better than the national pace: U.S. rents on homes rose 3.4% in the year ended in May. In other big U.S. markets, Chicago rose 6.6%, Charlotte was up 5.9%, and Boston and New York increased 5.7%. Let’s note that Las Vegas rents fell 1.3% in 12 months.
Details
Look at the nine California markets in May, ranked by the past year’s rent hikes …
Ventura County: Rents on single-family homes are up 0.5% in the past year vs. hikes of 11.8% in the previous 12 months and 3.8% annual average increases in 2011-2020.
San Francisco County: Up 0.7% in past year vs. 11.2% previous 12 months and 5.7% average 2011-20.
Inland Empire: Up 1.3% in past year vs. 13.2% previous 12 months and 3.5% average 2011-20.
Alameda County: Up 1.8% in past year vs. 8.2% previous 12 months and 4.6% average 2011-20.
Los Angeles County: Up 2.7% in past year vs. 10.5% previous 12 months and 4.1% average 2011-20.
Santa Clara County: Up 2.9% in past year vs. 6.8% previous 12 months and 5.1% average 2011-20.
Orange County: Up 3.2% in past year vs. 14.9% previous 12 months and 3.5% average 2011-20.
San Diego County: Up 3.2% in past year vs. 16.1% previous 12 months and 3.5% average 2011-20.
Bottom line
Why? Well, there’s less demand. Renters no longer feel forced to rent larger spaces as workers return to the office and students return to the classrooms.
Plus, a stagnant population isn’t creating many new households.
And landlords have added competition – both new apartments as well as investors who rushed in to buy existing homes in order to grab some of the soaring rents.
As a result, rent increases are moderating. Look at what apartment owners are doing.
Statewide, ApartmentList.com calculated rents fell 0.6% in the year ended in May vs. 15.2% increases in the previous 12 months and 2.3% average annual gain in 2017-2020.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]