Are Southern California apartment rent hikes chilling?

“Rent Check” gives a snapshot of the financial challenges tenants face in Southern California’s tight market for rentals — and how it varies across the region.

Buzz: Southern California tenants have to look hard for bargains, but August brought a glimmer of hope as apartment rent hikes chilled a bit.

Source: My trusty spreadsheet reviewed ApartmentList’s monthly rent estimates for 21 large cities in the four-county region with a combined population of 8 million residents. To see what existing tenants are paying, ApartmentList looks at what’s happening with asking rents in its own online listings plus landlord pricing data from government sources.

The big picture

Remember, we are talking smaller increases in general, not any large wave of landlords cutting prices.

SoCal big-city rent was $2,107 a month, up $8 in one month and $171 higher in a year. That’s a population-weighted average of the rent indexes for the 21 cities.

Lansner’s mailbag: Housing crash is media’s fault

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One-month change: 0.38% gain vs. average 0.64% increases previous six months — or $8 hikes vs. $13 increases. Rents rose in 15 of the 21 cities in the month.

12-month change: 8.8% jump vs. average 15.8% increases previous six months — or $171 hikes vs. $300 increases. Rents rose in all cities in the year.

Five-year rent inflation math shows increases at a 4.4% annualized pace since August 2017.

The cityscape

Trends vary across Southern California. Let’s look at renting’s extremes at the city level, starting with typical monthly rents …

The highest rent was found in Irvine at $3,125, followed by Temecula at $2,899 and then Rancho Cucamonga at $2,650.

The best bet for tenants was in Long Beach where rent averaged $1,756. Next was Los Angeles at $1,920 and Riverside at $1,994.

Next, how monthly changes varied …

Worst for tenants: Burbank rents were up 1.8%, Glendale 1.7%, and Pasadena 1.6%.

Best for tenants: Santa Clarita rents were down 0.6%, Costa Mesa off 0.5%, Huntington Beach down 0.5%.

Or trends over the past 12 months …

Worst for tenants: Santa Ana was up 15.3%, Long Beach at 12.5% and Pasadena 12.5%.

Best for tenants: Rancho Cucamonga was up 2.4%, followed by Ontario at 5.7% and Corona at 5.9%.

And with a longer-term lens, a peek at five-year annual rent inflation …

Moreno Valley rent has risen at 7.4%-a-year pace, followed by Temecula at 7.2% and Rancho Cucamonga at 6.6%.

The lowest rent inflation was found in Los Angeles, up 2.5%, Orange, up 3.6% and Glendale 3.7%.

The bottom line

The pandemic changed — at least temporarily — how we think about living arrangements, prompting folks to seek their own place or bigger living areas.

If coronavirus has now become part of life — and not an emergency — will the once-hot demand for housing cool significantly?

Landlords seem to be sensing pushback after rents by this math jumped 24% in five years.

The caveat

Rent data varies widely depending on who is counting what, where and when. Is a certain report looking at asking rents for empty apartment units, condos or single-family homes? Or are studies tracking what management companies are collecting each month? Or what tenants say they are paying for any unit?

One example: The Consumer Price Index’s rent index is drawn from a survey of consumers asking what they paid in a wide range of rental arrangements. The rent CPI for Riverside and San Bernardino for July was up 8.8% in a year. In Los Angeles and Orange counties, rent inflation was 4.3%.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Source: Orange County Register