California rents down 2.4% in a year, biggest drop in 29 months
August is the fourth-consecutive yearly decline for the statewide rent benchmark.
“Rent Watch” tracks what’s happening at the intersection of landlords and tenants – who is paying what and where.
Buzz: California rents are dropping at their fastest pace since early 2021.
Source: My trusty spreadsheet’s look into ApartmentList’s tracking of rents and vacancy rates across California using their yardstick for the monthly cost of for units of all sizes.
Top Line
The typical California apartment cost $1,958 a month in August, that’s off 2.4% in a year – the biggest drop since March 2021 as pandemic-era lockdowns were still chilling the economy. Nationally, rents fell 1.2%.
The previous year’s decline is a relief for Golden State tenants who’ve seen rents rise statewide at an annual rate of 4.6% over the previous four years.
You see, landlords became discounters this year because renters have options. Just ponder the growing number of empty units.
The statewide vacancy rate was 5.1% for the third month in a row in August – up from 4% a year earlier. This is the biggest number of rentals landlords have to fill since March 2021. Nationally, 6.4% of units were vacant in August.
Still, it’s relatively hard to find a place. California vacancies remain below pre-pandemic norms – they averaged 5.4% in 2018-19.
County change
These are broad trends. Rents fell in all but one of 15 counties tracked with most of the steepest decline to the north. Vacancies rose across the state.
Look how rental markets in large California counties fared in August, ranked by the size of the rent declines …
Contra Costa: $2,025 rent monthly in August, off 4.9% in a year vs. 3% average gains during the previous four years. Vacancy rate was 5.5% in August vs. 3.9% a year earlier and 4.8% in 2018-19.
Riverside: $2,031 – off 4.5% in a year vs. 10.1% yearly gains previous 4 years. Vacancy of 4.82% vs. 3.89% a year ago and 4.87% in 2018-19.
Alameda: $2,068 – off 4.5% in a year vs. 1.1% yearly gains previous 4 years. Vacancy of 6.2% vs. 5.1% a year ago and 4.7% in 2018-19.
San Francisco: $2,207 – off 4.3% in a year vs. an average 2.5%-a-year dip in the previous 4 years. Vacancy of 5.2% vs. 5% a year ago and 4.1% in 2018-19.
San Mateo: $2,478 – off 3.6% in a year vs. 0.4% yearly gains previous 4 years. Vacancy of 5.1% vs. 4.4% a year ago and 4.6% in 2018-19.
Santa Clara: $2,560 – off 3.1% in a year vs. 1.6% yearly gains previous 4 years. Vacancy of 5.3% vs. 4.2% a year ago and 6% in 2018-19.
San Joaquin: $1,528 – off 3% in a year vs. 6.2% yearly gains previous 4 years. No vacancy data.
Sacramento: $1,664 – off 2.8% in a year vs. 7% yearly gains previous 4 years. Vacancy of 4.9% vs. 3.9% a year ago and 4.5% in 2018-19.
Sonoma: $1,971 – off 2.5% in a year vs. 3.2% yearly gains previous 4 years. Vacancy of 4.3% vs. 3.1% a year ago and 5.2% in 2018-19.
Los Angeles: $1,927 – off 2.4% in a year vs. 3.6% yearly gains previous 4 years. Vacancy of 5.5% vs. 4% a year ago and 5.8% in 2018-19.
Ventura: $2,443 – off 2.2% in a year vs. 5.9% yearly gains previous 4 years. Vacancy of 4.8% vs. 4.1% a year ago and 5.2% in 2018-19.
San Bernardino: $1,848 – off 1.9% in a year vs. 9% yearly gains previous 4 years. Vacancy of 4.1% vs. 3.3% a year ago and 5.7% in 2018-19.
San Diego: $2,427 – off 1.3% in a year vs. 8.1% yearly gains previous 4 years. Vacancy of 4.5% vs. 2.6% a year ago and 5.2% in 2018-19.
Orange: $2,643 – off 0.7% in a year vs. 7.1% yearly gains previous 4 years. Vacancy of 4.5% vs. 4.4% a year ago and 6.2% in 2018-19.
Fresno: $1,327 – up 1.7% in a year vs. 7.2% yearly gains previous 4 years. No vacancy data.
Bottom line
August is the fourth consecutive month we’ve seen a 12-month decline as measured by this statewide rent benchmark. But let’s not forget that California rents are up 17% in five years.
Those long-run rent hikes, however, are a very split picture by county. Tenants to the south and inland now send significantly larger checks to the landlord.
Riverside rents are up 40% since 2018 and up 38% neighboring in San Bernardino. And 20%-plus gains can be found in San Diego (35%), Fresno (34%), Orange (30%), Sacramento (27%), San Joaquin (23%), and Ventura (23%).
Conversely, rents are down over five years in San Francisco (off 14%) and San Mateo (off 2%). And Alameda’s flat.
In-between are counties with modest hikes: Los Angeles (up 12%), Sonoma County (up 11%), Contra Costa (up 7%), and Santa Clara (up 3%).
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com