California’s Rent Market Gets Good News – Newsweek

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Renters living in some of California’s biggest cities can finally catch their breath as rent prices fall in places like Oakland, San Jose, San Diego and San Francisco—some of the most expensive metropolitan areas in the country.

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According to a May 28 report from digital marketplace Zumper, which analyzed more than one million active property listings across 100 cities, seven out of 11 California cities observed reported rent declines between 2023 and 2024.

Oakland, a city that has suffered the downturn of the tech sector and the exodus of some of its residents after the pandemic, reported the biggest annual rent decline of all of the Golden State, -9.1 percent between 2023 and 2024. It was followed by Sacramento (-8.1 percent), Los Angeles (-5.0 percent), San Jose (-2.3 percent), San Francisco (-1.7 percent), San Diego (-1.3 percent), Long Beach (-1.1 percent).

Some of these cities are considered among the most expensive for renters in the entire nation.

According to an analysis of data from the U.S. Department of Housing and Urban Development’s 2024 50th Percentile Rent Estimates data set and the U.S. Census Bureau’s 2022 American Community Survey 1-Year Estimates conducted by Construction Coverage, San Jose-Sunnyvale-Santa Clara was the most expensive large metropolitan area in the country for renters, with an annual median rent of $3,451.

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Three other California cities were in the top four more expensive metros at the time of the analysis: San Diego-Chula Vista-Carlsbad ($3,175), San Francisco-Oakland-Berkeley ($3,141), and Los Angeles-Long Beach-Anaheim ($2,777).

At the national level, rent prices are increasing. In May, according to Zumper, the national rent index saw the median prices of one- and two-bedroom apartments rise by 1.2 percent to $1,504 and $1,865, respectively.

Zumper experts said the decline in rent prices in the seven Californian cities has been led by a drop in demand.

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“It seems that it is less of a supply factor that is driving rents down in California right now, which is what’s happening in many other U.S. markets and especially in the Sun Belt area, but more of a demand one,” reads the Zumper report.

“Of the top 50 largest markets, the Bay Area and the Los Angeles metro area have seen some of the largest population losses in the last few years,” the experts wrote, adding that both San Francisco and Los Angeles have not recovered from the COVID-related job losses experienced during the pandemic.

San Francisco rental market
A neighborhood in San Francisco, California, as seen on June 9, 2023. Several cities in California saw rent prices fall between 2023 and 2024, mainly due to a drop in demand.
A neighborhood in San Francisco, California, as seen on June 9, 2023. Several cities in California saw rent prices fall between 2023 and 2024, mainly due to a drop in demand.
Justin Sullivan/Getty Images

Newsweek reached out to Zumper for comment via email on Friday.

According to the latest data, California’s unemployment rate was the highest of all states, at 5.3 percent, in April.

Cities like San Diego and Sacramento are also facing different types of struggles which likely led to the drop in demand that Zumper refers to. San Diego, according to a February report from Real Page, reported the worst demand performance of all the country’s 150 largest apartment markets in Q4 2023, reporting net move-outs from nearly all its submarkets.

Sacramento continues to struggle with low occupancy rates amid supply-side pressure.

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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

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