Redondo Beach Leads L.A. for Rent Growth
Rents in Redondo Beach have increased nearly $200 on average since the beginning of the year.
“Last year there have been consistent differences among average figures reported at the beginning of the year, $2,287, compared to peak rental season, $2,360. Compared to the average at the beginning of 2019, $2,320, rents in Redondo Beach saw a $195 spike reaching $2,515 this June,” Alexandra Ciuntu of Yardi’s Rent Café, tells GlobeSt.com. “Given the renter population closing in on almost 50% according to the US Census and occupancy close to 98%, construction development in the area has yet to catch up with demand resulting in rents picking up speed.”
Overall, average apartment rents in Los Angeles have increased $49 since the beginning of the year. The nominal increase has become the norm in the market, where rent growth has slowed dramatically. “Residential rental growth so far has been rather constant, similar to the trend of past years,” says Ciuntu. “In this first half of the year, the Los Angeles metro saw strong multifamily demand, in part backed by steady employment rates and company extensions, with rent prices still above national average despite supply and investment hikes over the past years. Its popularity with tourists also comes into play as a number of new attractions expected to draw in numbers that rival last year’s 50 million all-time high.”
While Redondo Beach is seeing strong rent growth, other L.A. markets are actually seeing a decline in average rents. Pasadena and West Hollywood both saw prices decrease nominally—$4 in Pasadena and $24 in West Hollywood. In Southern California, eight cities had either flat or declining rents in the first half of the year, including Orange, Fountain Valley and Carlsbad. Northern California in general, is seeing better rent growth.
Ciuntu expects rents in the Greater L.A. area to continue to grow at a slower pace through the end of the year. “Following seasonality patterns and nationwide trends, renting in the metro has so far been influenced by household demand in the wake of all-time-low unemployment rates—Yardi Matrix reports around 66,200 jobs added just last year,” she says. “Moreover, with unemployment rates reaching 4.6% in June, these could be grounds enough for rent growth to keep a steady pace unless the end of peak rental season brings a significant drop at the end of summer.”