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Santa Monica Rents Drop During Peak Moving Season
By Jorge Casuso
May 31, 2023 -- Following a brief two-month rise, rents in Santa Monica dropped by -0.9 percent in May and have fallen -0.4 percent so far this year, according to Apartment List's latest monthly report released Wednesday.
The drop over the first five months compares with a 5.1 percent rent growth during the same period last year, according to data compiled from listings on the popular rental website.
This month's drop, which comes in the midst of the rental market's peak season, erased an 0.8 percent gain in April and comes as the national market continues to cool.
Nationwide, rents rose by 0.5 percent this month, marking the slowest May increase since the coronavirus shutdown in 2020, according to the report.
"The stagnant rent growth that we’ve seen over the past couple of months indicates that the market cooldown that started in the second half of 2022 is continuing," Apartment List researchers wrote.
"From 2017 to 2019, rents increased by an average of 1.1 percent in May, more than double this month’s increase," the report said.
The overall median rent in Santa Monica currently stands at $2,183, with a median rent of $2,063 for a one-bedroom unit and $2,570 for a two-bedroom unit.
The citywide apartment vacancy rate stands at 8.7 percent, down 0.7 percentage points from this time last year.
Year-over-year rent growth in Santa Monica now stands at 0.9 percent, down from 13.5 percent one year ago, according to the report.
That is still higher than the state average rent growth of -0.7 percent over the past year and mirrors the national average rent growth of 0.9 percent.
Since the start of the COVID-19 emergency in March 2020, citywide rents have risen a total of 0.7 percent, according to the report.
In May, rents increased in 76 of the nation’s 100 largest cities, up from 69 cities last month, with New York City showing the fastest rent growth at 2 percent after "a particularly sharp winter dip."
Scottsdale, Arizona had the biggest month-over-month decline with a 0.9 percent drop, "signaling the continuation of a broader cooldown in the Phoenix metro area."
"It’s likely that the year-over-year growth rate will continue to fall at least through the end of the summer, as monthly rent increases in 2023 continue to lag those of 2022," the report predicts.
"In fact, it’s now looking increasingly likely that year-over-year growth could even dip into negative territory in the months ahead."
While Santa Monica rents have decreased during seven of the last nine months, they remain 4.3 percent higher than the $2,092 median rent for the LA Metro region.
Of the 26 regional communities analyzed in the report, Marina del Rey remains by far the most expensive, with a median rent of $4,608, while Long Beach remains the most affordable city, with a median rent of $1,686.
Torrance had the fastest annual rent growth at 5.5 percent, while the slowest was Costa Mesa, which saw rents drop by -5.1 percent, according to Apartment List's monthly report.
Researchers note that some tenants across the country are delaying moves "as recession fears continue to grip many Americans . . . translating to sluggish rental demand.
"The surging rent growth that we saw in 2021 and the first half of last year is now solidly behind us."
Apartment List Rent Report data are drawn monthly from the millions of listings on the site, according to the website.
The report calculates one-bedroom and two-bedroom rents and "aims to identify transacted rent prices, as opposed to the listed rent prices." To view the full report click here.
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