The average asking rent in Los Angeles County declined 3.3 percent in May year-over-year, the first major drop in rent since the Great Recession a decade ago.
Data from RealPage shows asking rent dropped to $2,254 for units of all sizes, according to the L.A. Times. The drop followed April’s 0.8 percent year-over-year decline, the first since 2010.
The coronavirus pandemic resulted in a “big dropoff in overall demand,” according to RealPage chief economist Greg Willett.
The data comes with some caveats. RealPage’s data reference only professionally managed apartments and not those owned by smaller mom-and-pop landlords, who typically charge lower rent.
Average asking rent is more difficult to calculate than home prices because rents are not public record.
Some landlords may also be offering concessions such as free months of rent in lieu of dropping rents, allowing them to maintain higher asking rents on paper. That was already happening before the pandemic in Downtown L.A. where demand didn’t keep up with supply.
RealPage’s data shows that rent only fell for apartments priced at the top and middle of the market — rents at the low-end of the market were essentially flat. The 4.5 percent decline in the Class B segment was the largest decline among the three segments.
The company projects that rents will continue to fall on a year-over-year basis throughout the year and could reach 5.6 percent in the first quarter of 2021. [LAT] — Dennis Lynch