Apartment vacancies in California have hit a two-year high, with rents falling across the Golden State.
The statewide vacancy rate rose to 5.2 percent in March, the highest level since April 2021 and up from the 3.6 percent pandemic low in September-November 2021, the Orange County Register reported, citing a survey by ApartmentList.
Meanwhile, apartment rents in the state’s dozen most populous counties fell 3.5 percent from their August peak. The vacancy rate in Los Angeles was 5.4 percent, with average rents down 2.1 percent since 2021.
A return to normal since the pandemic that has slowed housing markets has now forced landlords to compete for tenants, as renters select from more available units.
The increased vacancy rate has pushed typical rents down to $1,930 a month, $70 from the August peak. Despite the 3.5 percent drop, average rents statewide are still up 15 percent, or $253, in three years.
The reduced demand for apartments since the pandemic may result from a reduced fear of catching COVID-19 in crowded living arrangements, according to the Register.
A return of workers to the office and children to classrooms has also limited the need for additional home office or study space. The previously soaring rents may have some apartment hunters rethinking their search during a wobbly economy.
Developers saw the landlord-friendly conditions of rising rents and few vacancies in 2021 and rushed to build.
Statewide permits for multifamily housing totaled 106,000 in 2021-22 — a jump from the 71,000 average for two-year periods in the previous 30 years.
At the same time, the new supply of rentals are opening as the state population is shrinking. The in-state migration from large coastal cities toward inland regions that accelerated during the pandemic days has also cooled.
The result: California may be more renter-friendly for many months to come, according to the Register.
Rents are now off their peaks in all 12 markets. In Los Angeles County, a typical apartment in March rented for $1,920 a month — off 2.1 percent, or $41, from the August peak, but up 12 percent, or $206, in three years. The vacancy rate was 5.4 percent, compared to a 4.0 percent pandemic low.
In Orange County, the rent was $2,594 a month — off 2.7 percent, or $72, from a September peak, but up 27 percent, or $559, in three years. The vacancy rate was 5.1 percent, versus a 2.3 percent pandemic low.
In Riverside County, the rent was $2,038 a month — off 4.3 percent, or $92, from a June peak, but up 39 percent, or $567, in three years. The vacancy rate was 4.9 percent, versus a 1.3 percent pandemic low.
— Dana Bartholomew
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