Los Angeles’ rental market may have started to bounce back after 12 consecutive months of stagnant or declining prices.
The latest report from apartment rental platform Zumper indicates that one-bedroom median rent ticked up 0.5 percent on a monthly basis in March to $1,910. Although the price is down 15.1 percent compared to the same period last year, this marks the first increase in over a year. With the exception of March and November of 2020, when prices remained flat, one-bedroom rent had fallen every month since the start of the pandemic.
Median two-bedroom rent saw a continued monthly drop of 0.4 percent, amounting to $2,650. The price has plunged 12.8 percent from March 2020, representing a difference of $390. It’s unclear how long it will take for prices to return to their pre-pandemic levels but rising vaccination rates in Los Angeles County could instill confidence in the rental market.
Across the country, rents in what Zumper calls destination cities — mid-sized, historically cheaper markets — are beginning to wane. With the proliferation of remote work, many renters flocked to more affordable cities like Cleveland, Ohio, Providence, Rhode Island and St. Louis, Missouri over the course of the past year.
“However, rent growth in these pandemic destination cities peaked for the most part at the end of 2020, and growth has since declined,” wrote Zumper data analyst Neil Gerstein, who authored the report.
In addition to Los Angeles, a few other expensive coastal cities are beginning to see their rental prices rebound. In March, New York, Boston and Washington, DC all posted monthly gains of between one and five percent for one-bedroom apartments. It remains to be seen whether renters will return to these high-priced markets in the coming months or if work-from-home policies will prompt them to stay put.
“Despite slowdowns, destination cities are still around 10-15% more expensive than a year ago, while expensive urban markets are at a discount between 15-20%,” noted Gerstein.