Big Changes in Rent - Los Angeles Rents Down 11%!

2 Replies

Due to Covid we are seeing many people moving out of higher priced areas and move to more affordable "Zoom Towns" where they can work at a fraction of a price with more space. As a result rents are dropping in many expensive areas. 

Are you seeing this in your area? How is this impacting your investing? How long do you think this will last?

  • Los Angeles down 11%
  • Santa Monica down 15%
  • Oxnard up 15%

https://www.zumper.com/blog/lo...

@Nick Hedberg Flag on the play for methodology, this article is looking at active rentals when they did this.  

A plausible scenario in my mind is that lower income tenants that rent lower rent units were more likely affected by covid and had to move making the units vacant.  Higher income tenants with higher rent units are also more likely to stay put due to current uncertainty.  

There is no sample size data for any of the cities, some of which will have very limited inventory to begin with, so it is really difficult to draw conclusions from, for example on Zillow Temecula has 6 units that fit the criteria, and the average is nowhere near the $1450 the article claims.  Also no data source is provided for either where they collected current year or past year data, so without more info this article is little more than clickbait.

Hi @Aaron K. - you bring up some good points about the data from that article. Accurately tracking rented units is difficult since there is no single source of truth and the data is certainly volatile. Plus few sites actually track on "Sold" price for rentals. The listing just disappears once it's leased, or they change their mind about leasing it. The MLS does, but it's not a main source of rental listings, especially cheaper units.

My main point is that we are seeing the rental market changing. People are moving from expensive areas to more affordable areas. I would appreciate feedback on what people are seeing in their market. Here are two additional articles:

https://patch.com/california/s...

https://www.usatoday.com/story...