The price of renting in Los Angeles continues to plateau, even as the cost of buying a home rockets upward to unprecedented levels.
According to a report from rental website Apartment List, the median price of a two-bedroom apartment was $1,740 in April—unchanged from a month earlier. The cost of a one-bedroom is up slightly, but only by $10. The median is now $1,360.
Those prices are based on census data, giving a good sense of what residents are paying right now. Other sites, like CoStar, base rental calculations on databases of current listings. CoStar finds the average price for a one-bedroom to be $1,651; for a two-bedroom, it’s $2,109.
Both price trackers find that prices have been relatively stagnant in recent months. According to Apartment List, rental prices have jumped 2.1 percent since May 2017, but haven’t gone significantly up or down since the start of this year. That mirrors national trends; across the country, rental prices have gone up just 1.5 percent in the past 12 months.
These flattening costs follow years of steady price growth since the Great Recession, during which time Los Angeles became one of the most difficult cities in the United States for renters to afford.
Richard Green, director of the Lusk Center for Real Estate at USC, tells Curbed that steady rent growth may be slowing in response to new housing construction in the Los Angeles area.
“In LA, we’ve sort of been building enough to meet new demand, and that helps,” says Green.
Though a recent state analysis found that Los Angeles is failing to meet goals for affordable housing construction, the city has already exceeded a benchmark for new market rate housing that it had until 2021 to hit.
Still, Green says he’s been somewhat surprised by how quickly rental prices have tapered off. The market has “definitely softened a little more than I was expecting,” he notes.
Green says he’s looking into the possibility that, with steady job growth throughout the area, more renters have been able to buy property.
“If people are buying homes and moving into them, that opens up rental inventory,” Green explains.
Will prices start rising again soon? That depends on the economy, says Green.
If it remains strong, under-development in areas outside the city center could make prices higher across the region. But an economic slowdown or a recession would likely counteract that, keeping rental prices down (though tenants dealing with the effects of a poor economy might not notice much).