Los Angeles Apartment Rents Stabilize in February

After several months of decline, Los Angeles apartment rents held stable in February, according to research from Apartment List. Average rents stood at $1,511 for a one-bedroom apartment and $1,982 for a two-bedroom. While rents have stabilized, they are down 8.3% year-over-year.

“It’s likely that this is signaling a real stabilization in rents. Although rent growth was flat, it’s worth pointing out that this is the first month since February 2020 where rents in L.A. didn’t drop,” Rob Warnock of Apartment List, tells GlobeSt.com. “After a full year of steady declines, it’s possible that the pandemic-driven rent drop has run its course and that next month we’ll see rents in L.A. start to tick back up.”

Los Angeles continues to follow similar trends as other markets. Affordable markets are seeing stronger rent growth while expensive rents are decreasing. “We’re seeing a sort of rent convergence in a lot of regions. L.A.—and Southern California more broadly—are great examples of this trend,” says Warnock. “While rents are down year-over-year in LA (-8%), Santa Monica (-14%), and Playa Del Ray (-7%), they are up in Inland Empire cities like Riverside (+7%), Rancho Cucamonga (+13%), and Ontario (+12%).”

Rent stabilization has helped save Los Angeles from severe rent decreases. The market does not rank in the top metros for apartment rent losses in 2020, a list that is topped by San Francisco. “L.A. as well as the broader Southern California region didn’t experience the same magnitude of rent decreases as other expensive markets like San Francisco, New York, Seattle, or Boston,” says Warnock. “This signals that L.A. maintained a relatively high level of inbound demand even as people were reconsidering their living arrangements.”

This could be due to the moderate climate that has long made Southern California popular among renters. “Our research on the subject of renter migration is still preliminary, but one of the theories that we are testing is that temperate climates and on-average larger housing units meant cities like Los Angeles and San Diego remained attractive to new renters, even as the pandemic wore on and many urban amenities were put on hold,” says Warnock.

Overall, apartment fundamentals seem to be improving. Apartment List expects urban markets to see a rebound in rents this year. “In virtually all of the markets where rent prices cratered in 2020, we are seeing a stabilization in both rents and vacancies,” says Warnock. “Tracking vacancies is important because it gives us a clue as to whether or not landlords are having a difficult or easy time finding new tenants, which in turn leads them to adjust rents up or down. In L.A., vacancies peaked in the months following the pandemic and have been slowly dropping since last fall, signaling that rent will continue moving in the current direction.”