L.A. Apartment Rents Fall Nearly Half a Percent in December

Los Angeles apartment rents have fallen another .4% in December, according to research from Apartment List. Apartment rents have declined steadily throughout the pandemic, now totaling a total of 7.9% rent decrease since the start of the pandemic.

While rents have continued to decline, the rate of decline is slowing. “L.A. rents have dropped in every single month, but the rent drop in December was milder than any other month since the pandemic started in March. We’re seeing this in a lot of cities, in fact,” Rob Warnock, a research associate at Apartment List, tells GlobeSt.com.

Month-over-month rents fell in 1.5% in May and another 1.3% in June, the steepest decline on during the pandemic. Rents decreased .7% to 1% during the remainder of the pandemic, fluctuating each month. “The most tumultuous months were the spring and summer months when the usual summer surge of renters into expensive cities failed to materialize. In LA, the rent change in December 2020 is roughly equal to the rent changes measured in each of the three previous December,” adds Warnock.

Los Angeles apartment rent growth had slowed prior to the pandemic after several years of significant gains. However, the pandemic catalyzed steep decreases that the market hasn’t seen since the previous recession. “Prior to the pandemic, rents in L.A. were following seasonal fluctuations: typically rising in the spring and summer, typically plateauing or falling in the fall and winter,” says Warnock. “But all-in-all, they trended upward and certainly got more expensive with time. The biggest impact that the pandemic had was that it eliminated the summer moving season that typically drives up rents, especially in the expensive urban areas that attract high-earners.”

Rent declines should continue to slow through 2021, particularly in coastal markets, which have had the steepest decline in rental rates. “In many cities where rents fell dramatically in 2020, we are now seeing rent declines slow in velocity and look more similar to prior, pandemic-free years,” says Warnock. “The big question will be whether the pandemic will be under control enough in the spring and summer to draw back the renters who moved away in 2020, or bring in the renters who planned to move to L.A. but decided against it.”

Renters could return to urban areas as soon as businesses reopen and coveted amenities are available again. “As soon as vaccine is widely available and urban amenities like restaurants, bars, and sporting events are reopened to the public, I think plenty of people will be enticed by recent affordability gains and the market will start to come back to life,” says Warnock. “Whether that happens in the spring, or later in the year, is difficult to predict.”