{"id":147185,"date":"2023-02-27T16:59:26","date_gmt":"2023-02-27T23:59:26","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=147185"},"modified":"2023-08-10T13:47:11","modified_gmt":"2023-08-10T19:47:11","slug":"california-rent-report","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/california-rent-report","title":{"rendered":"2023 Regional Rental Report: California"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC4751068474\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><em>This article is presented by <a href=\"https:\/\/try.belonghome.com\/biggerpockets-blog\" target=\"_blank\" rel=\"noreferrer noopener\">Belong<\/a>. Read our&nbsp;<a href=\"https:\/\/www.biggerpockets.com\/editorial-guidelines\" target=\"_blank\" rel=\"noreferrer noopener\">editorial guidelines<\/a>&nbsp;for more information.<\/em><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There are few real estate markets with as many attractive cities as California. From the allure of luxury and lifestyle in Los Angeles to the technology heart of San Francisco, there\u2019s a reason why California rents are often reported to be the highest in the nation.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The California real estate market is an important one for real estate investors thanks to its large and diverse economy that spans numerous industries, including technology, entertainment, and agriculture. This creates sky-high demand for housing, leading to attractive rental income and consistent property appreciation. It also makes California an incredibly competitive real estate market.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">It\u2019s not the easiest region to achieve positive cash flow in real estate, with a higher entry point than many other states. Those who already own property, have recently&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/options-inherited-property\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">inherited a home<\/span><\/a><span data-preserver-spaces=\"true\">, or have decent capital to reduce debt servicing tend to fare the best in the Californian market.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Whether you\u2019re a seasoned investor or new to the market, BiggerPockets has teamed up with&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Belong<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to bring you a snapshot of key regions that give you an indication of the market&#8217;s state and help you make decisions for the year ahead. Belong is a modern alternative to property management companies that humanizes the rental experience and makes it easier for&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/homeowners\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">individual homeowners<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to manage real estate investments.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Rental Rates in California<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">According to the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/quickfacts\/CA\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">2021 Census data<\/span><\/a><span data-preserver-spaces=\"true\">, California&#8217;s median gross rent paid per month is $1,698, with 49% of households renter-occupied. Of course, when looking at median and statewide figures, it\u2019s worth remembering that these incorporate everything from a studio apartment in Brentwood to a luxurious mansion in Beverly Hills. Market rates fluctuate all the time, and California is a big state, too, with a number of unique and diverse localities within it.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Here\u2019s a quick snapshot of the Californian market based on the latest&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/quickfacts\/CA\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">U.S. Census data<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Population:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;39.24 million<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Median annual household income:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$84,907<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Median monthly gross rent:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$1,698<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Median monthly household costs:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$1,810&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Median annual real estate taxes<\/span><\/strong><span data-preserver-spaces=\"true\">: $5,151<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Renter-occupied:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;49.1%<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Does this paint a realistic picture of what to expect in the Californian real estate market? Not necessarily. Although the median monthly household cost is $1,810, the reality is that 42.6% of households have costs over $2,000 per month, with almost 20% facing costs of over $3,000 per month.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Let\u2019s take a look at some of the major metropolitan areas within California, along with their census data and trending data from Belong and their data partners on what people are actually paying in these areas.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Los Angeles&nbsp;<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Los Angeles County is home to over 9.8 million people, with over 3.8 million living in the L.A. metro area. The median household income is slightly lower than California as a whole at $76,367, with a median gross rent of $1,653.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What\u2019s the average rental rate in 2023?&nbsp;<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Los Angeles is a high-demand city, with 63% of households renter-occupied. According to real estate listing sites and Belong\u2019s data partners, the average rent in Los Angeles as of January 2023 is:<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Studio:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$1,698 (+10% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">1-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$2,395 (+7% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">2-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$3,190 (+7% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">3-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$4,378 (+4% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">4-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$5,925 (no change)<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Belong, who caters primarily to owners of single-family homes and condos, has seen an&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">average rental rate of $3,885.92\/month&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">for the Los Angeles market. Cities in the L.A. market attract the highest rates on the Belong platform, sitting 3% above San Francisco\u2019s Bay Area and 53% higher than the average rent in Miami, Florida.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">While rents have continued to rise across California, it hasn\u2019t been all &#8220;flowers and sunshine&#8221; for homeowners and real estate investors in Los Angeles. Between 2020 &#8211; 2022, many individual investors have been hit with rent freezes and&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/la-eviction-moratorium\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">eviction moratoriums<\/span><\/a><span data-preserver-spaces=\"true\">. In some regions, rents even dropped as people left key metro areas in favor of more affordable housing and larger spaces.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As the pandemic effect slows and people return to cities, the rental market is seeing a return to more regular seasonal changes. So despite reports of&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.corelogic.com\/intelligence\/corelogic-us-annual-rent-growth-drops-for-the-seventh-straight-month-in-november\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rental growth dropping<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for single-family homes,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/how-to-price-la-rental-property\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">L.A. rents<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;are still up year-on-year, and dips could be more closely related to slower demand during the winter months.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">San Francisco<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">In San Francisco\u2019s Bay Area, with a fruitful job market and smaller population than Los Angeles, the average income is considerably higher at $126,187. The asking rents match, with the average studio apartment renting above $2,000 and single-family homes with two or more bedrooms averaging $4,000\/month or higher.&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Population:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;815,201<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Median annual household income:&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">$126,187<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Median monthly gross rent:&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">$2,130<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What\u2019s the average rental rate in San Francisco in 2023?&nbsp;<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">According to Belong\u2019s data partner, the average rent in San Francisco as of January 2023 is:<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Studio:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$2,195 (+6% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">1-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$2,950 (+4% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">2-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$3,950 (no change)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">3-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$4,895 (+5% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">4-Bedroom:&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">$6,000 (+6% YoY)<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Like Los Angeles, the Bay Area has a high demand for rentals, with 62% of households renter-occupied, thanks to the lucrative technology industry and the job market. Like most technology hubs, the Bay Area saw a decline in rents when the pandemic hit and more people worked from home. As people return to cities, San Franciso is seeing a growth in&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/how-much-rent-to-charge-bay-area\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rental rates<\/span><\/a><span data-preserver-spaces=\"true\">, albeit slower than other metropolitan areas. Something to watch out for will be lay-offs, with many&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2023\/01\/23\/technology\/tech-interest-rates-layoffs.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">high-profile technology businesses shedding staff<\/span><\/a><span data-preserver-spaces=\"true\">, which could significantly slow migration and rentals in the city.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">It should be noted that the market rents were always high, so any downward trends in growth are not resulting in below-market rates on rentals. For example, Sacramento enjoyed record growth in 2021 but still has rental rates significantly lower than the Bay Area.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Belong sees an&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">average rate of $3,753.92 per month<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;for single-family homes and condo rentals in the Bay Area market. This is a 30% premium over Sacramento, which sees an average rent of $2,733.33 per month.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">San Diego<\/span><\/h2>\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/san-diego-real-estate-market\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">San Diego<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;has long been a great choice for investors. With miles of picturesque coastline, a sunny climate, and a healthy economy, it\u2019s desirable for residents, and single-family homes can attract strong returns. While it\u2019s not the cheapest place to buy real estate, you might find better value than in many other parts of California. Also, the state\u2019s&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/california-rent-control-laws\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rent control provisions<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;are more favorable toward homeowners in San Diego than in Los Angeles.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">San Diego is home to more than 1.3 million people, with a median household income of $89,457. The median monthly gross rent sits at $1,885.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For a long-time, real estate investors in the San Diego area have concentrated heavily on the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/airbnbust-why-it-may-be-time-to-rethink-short-term-rentals\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">short-term rental market<\/span><\/a><span data-preserver-spaces=\"true\">. So much so that San Diego County has introduced&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/san-diego-short-term-rentals\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">new caps<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to make more homes available to long-term renters. Any new inventory hitting the long-term rental market can help with the supply issues, but with strong demand,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/san-diego-rental-pricing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rental prices<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;aren\u2019t taking a hit.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What\u2019s the average rental rate in San Diego in 2023?&nbsp;<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">According to Belong\u2019s data partners, this is the average rent in San Diego as of January 2023:<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Studio:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$1,825 (no change)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">1-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$2,295 (+5% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">2-Bedroom:&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">$2,995 (+2% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">3-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$3,900 (+8% YoY)<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">4-Bedroom:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;$4,945 (+12% YoY)<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Belong sees an&nbsp;<\/span><strong><span data-preserver-spaces=\"true\">average rate of $3,526.15 per month<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;for single-family homes and condo rentals in the San Diego market.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Rental Pricing Trends Across the Californian Market<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Another thing that median and average rent stats don\u2019t account for is the seasonality of the Californian real estate market. The average rents typically peak between April and June and again in September before dropping off and hitting their lowest during the winter.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For the past two years, rents have seen consecutive growth and followed less of a seasonal pattern. However, the recent slowing of prices from October to December suggests that this is stabilizing. In 2023 and going forward, homeowners are likely to be more reliant on listings during the peak months of August-September to achieve optimal pricing for their rental property.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Below is a graph based on the average rent on the Belong network over 2021-2022. Even with increasing rents, both years see steady rises in summer, with a peak in September, before dropping off again from October.&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Graph_1-1024x576.png\" alt=\"avg rent over time 2021 - 2022\" class=\"wp-image-147205\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Graph_1-1024x576.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Graph_1-300x169.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Graph_1-768x432.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Graph_1-1536x864.png 1536w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Graph_1.png 1920w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\"><em>Average Rent (2021 &#8211; 2022) &#8211; Belong Network<\/em><\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1794\" height=\"956\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.31.26-PM.png\" alt=\"avg rent over time 2022-2023\" class=\"wp-image-147189\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.31.26-PM.png 1794w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.31.26-PM-300x160.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.31.26-PM-1024x546.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.31.26-PM-768x409.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.31.26-PM-1536x819.png 1536w\" sizes=\"auto, (max-width: 1794px) 100vw, 1794px\" \/><figcaption class=\"wp-element-caption\"><em>Average Rent (2022 &#8211; 2023) &#8211; Belong Network<\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">Across 2022, we can see that rents were high in January before coming down in March. They rose again in September before dropping off again. Looking ahead at the projected rents for February and March (based on leases that are yet to commence, so this is subject to change), we see that a dip is projected in March 2023, and we would expect to see a rise in April-May leading into the summer period.&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1800\" height=\"956\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.32.21-PM.png\" alt=\"avg rent over time 2022-2023 san francisco, LA, OC, San Diego\" class=\"wp-image-147191\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.32.21-PM.png 1800w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.32.21-PM-300x159.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.32.21-PM-1024x544.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.32.21-PM-768x408.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.32.21-PM-1536x816.png 1536w\" sizes=\"auto, (max-width: 1800px) 100vw, 1800px\" \/><figcaption class=\"wp-element-caption\"><em>Average Rent in San Francisco, Los Angeles, Orange County, and San Diego (2022 &#8211; 2023) &#8211; Belong Network<\/em><\/figcaption><\/figure>\n\n\n\n<p><span data-preserver-spaces=\"true\">Looking at patterns of rental demand, the next chart looks at Belong\u2019s number of rental property applications, normalized by how many active listings are on the platform. This shows that the number of rental applications\/listings follows similar seasonal patterns, with rising prices not turning applicants off. Instead, the seasonal demand peaks help to buoy price increases as demand exceeds supply. When the sun is shining, homeowners can comfortably ask for more rent as competition increases on quality properties.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">What is also clear is that the balance of supply and demand can turn quickly. A hot market with low vacancy can turn in a matter of weeks, as evidenced by the rapid rise in applicants\/listings leading into the summer and the rapid decrease coming out of it. Practically, this means that to maximize your cash flow, you need to have a strong pulse on the market and adapt quickly.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1800\" height=\"956\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.33.19-PM.png\" alt=\"App submits normalized by active listings\" class=\"wp-image-147193\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.33.19-PM.png 1800w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.33.19-PM-300x159.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.33.19-PM-1024x544.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.33.19-PM-768x408.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-27-at-6.33.19-PM-1536x816.png 1536w\" sizes=\"auto, (max-width: 1800px) 100vw, 1800px\" \/><figcaption class=\"wp-element-caption\"><em>Application Submissions Normalized by Active Listings (2022 &#8211; 2023) &#8211; Belong Network<\/em><\/figcaption><\/figure>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Pro Tip:<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;If you\u2019re preparing your home for the rental market, work with your property manager (or an alternative such as&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/homeowners\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Belong\u2019s residential network<\/span><\/a><span data-preserver-spaces=\"true\">) to get your home listed during peak months to lock in the highest possible rate to optimize your cash flow. Belong, for example, leverages real-time demand signals from the market to help maximize rental income and keep homeowners cash flow positive. If your home needs maintenance work or renovations, it would be wise to plan for this to occur between now and the winter months, when rental income is at its lowest, before putting it back on the market at the peak.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Rental Vacancy Rates in California<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">When it comes to determining the overall supply and demand for rentals, a great place to start is the vacancy rate. A &#8220;good&#8221; vacancy rate is a low one, around 2-4%, indicating strong demand and low supply that pushes up rental pricing. A market vacancy rate above 5% signals that there\u2019s plenty of inventory on the market, and depending on your property type, potential residents may want to negotiate on price.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The rental&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/housing\/hvs\/data\/rates.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">vacancy rate<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in California was sitting at 4.1% toward the end of 2022, lower than 2021 (4.3%) but slightly higher than the start of the year, where vacancy rates were an even tighter 3.8%.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Looking at metropolitan areas, Los Angeles-Long Beach-Anaheim finished 2022 with a vacancy rate of 5.1%, which has increased significantly from 3.5%. This is coming off the back of two years of rapid rent increases and low affordability, which may have seen vacancies free up as people chose to move in with family or housemates to ease the cost of living and inflation pressures.&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/research\/december-2022-rental-report-31992\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Zillow<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;reported a slight decrease in rental prices in December 2022. However, this could also be linked to regular seasonality and related lower demand (as evidenced by Belong\u2019s data) rather than an influx of inventory.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In Riverside, rental vacancies remain low at 3.4%. While this is higher than at the start of 2022, where they were just 2.4%, it signals that hot rental competition remains.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In San Diego, has the new&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/san-diego-short-term-rentals\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Short-Term Rental Ordinance<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;put more inventory on the market or dented vacancy rates? It doesn\u2019t appear that way, with vacancy rates sitting lower in Q3 than in Q1 at a low 3.1%.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Over to the Bay Area, rental vacancies are higher at 5.2%, though this is trending downward from 5.6% at the beginning of 2022.&nbsp;<\/span><\/p>\n\n\n\n<p><strong><span data-preserver-spaces=\"true\">Rental vacancy rates in California, Q3 2022:<\/span><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">San Francisco-Oakland-Hayward: 5.2% (down from 5.6%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Los Angeles-Long Beach-Anaheim: 5.1% (up from 3.5%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">San Jose-Sunnyvale-Santa Clara: 4.6% (up from 3.7%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Riverside-San Bernardino-Ontario: 3.4% (up from 2.4%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Sacramento-Roseville-Arden-Arcade: 3.1% (up from 3.0%)<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">San Diego-Carlsbad: 3.1% (down from 3.7%)<\/span><\/li>\n<\/ul>\n\n\n\n<p><em><span data-preserver-spaces=\"true\">Source:<\/span> <a href=\"https:\/\/www.census.gov\/housing\/hvs\/data\/rates.html\" target=\"_blank\" rel=\"noreferrer noopener\">U.S. Census<\/a><\/em><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/the-sellers-strike-has-begun-why-the-housing-market-is-going-dark\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">recently noted<\/span><\/a><span data-preserver-spaces=\"true\">, there appears to be a \u201csellers strike\u201d taking place in the U.S., with many homeowners opting to rent out their homes and&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/renting-vs-selling-101\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rent elsewhere rather than sell<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and give up their low fixed-term interest rates. This could see more inventory hit the market, but also introduce more residents into the rental market. For potential investors, it means inventory could remain tight and provide less opportunity to take advantage of cooling prices.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">How Real Estate Investors Can Keep Track of California&#8217;s Market<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Whether you\u2019re new to the real estate investing game, dealing with a problematic property management company, or burnt out on self-managing your rental home, BiggerPockets, and Belong can help.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">From ebooks to podcasts,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BiggerPockets<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;offers&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/real-estate-investing\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">educational resources<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for every level of real estate investment experience and strategy. When it comes to managing your home, Belong is not a property management company but a residential network offering unique services to both homeowners and their residents.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">From not charging fees for the essentials to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/earn-guaranteed-rent\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">guaranteeing rent<\/span><\/a><span data-preserver-spaces=\"true\">, Belong will partner with you to make owning a rental property worth it. And you&#8217;ll never need to lift a finger. Learn more and find out if your home is eligible (<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/belonghome.com\/blog\/ditch-your-property-manager\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">even if you\u2019re mid-lease!<\/span><\/a><span data-preserver-spaces=\"true\">) at&nbsp;<\/span><a href=\"https:\/\/belonghome.com\/homeowners\" target=\"_blank\" rel=\"noreferrer noopener\"><span data-preserver-spaces=\"true\">belonghome.com\/homeowners<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('DoorLoop Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/california-rent-report',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"wp-block-heading has-text-align-left mt-0\"><strong>This article is presented by Belong<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-full is-resized is-style-default\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Belong-Logo-1.png\" alt=\"belong logo\" class=\"wp-image-147207\" style=\"width:500px;height:173px\" width=\"500\" height=\"173\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Belong-Logo-1.png 2000w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Belong-Logo-1-300x104.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Belong-Logo-1-1024x354.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Belong-Logo-1-768x266.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/02\/Belong-Logo-1-1536x531.png 1536w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p>Own a rental property? Say goodbye to property management and hello to Belong. Belong brings end-to-end home management services to your fingertips.&nbsp;<\/p>\n\n\n\n<p>Enjoy guaranteed rental payments, vetted residents who love your home the way you do, 24\/7 support for you and your residents, innovative cash flow solutions, an industry-leading mobile app, and maximized rental value.&nbsp;<\/p>\n\n\n\n<p>With Belong, you can create long-term wealth while earning passive income.<\/p>\n\n\n\n<div id=button-custom-event-block_63c9a33918e17 class='button-custom-event'>\n      <a href=\"https:\/\/try.belonghome.com\/biggerpockets-blog\" x-on:click=\"window.analytics.track(&#039;Sponsored Blog CTA Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/california-rent-report&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn More About Belong<\/a>\n  <\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>This article is presented by Belong. Read our&nbsp;editorial guidelines&nbsp;for more information. There are few real estate markets with as many attractive cities as California. From the allure of luxury and [&hellip;]<\/p>\n","protected":false},"author":613651,"featured_media":147215,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7364,7119],"tags":[],"class_list":["post-147185","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-markets","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/147185","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613651"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=147185"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/147185\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/147215"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=147185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=147185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=147185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}