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Rents in Los Angeles are NOT rising at all


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2012 May 6, 5:30am   18,834 views  44 comments

by Patrick   ➕follow (55)   💰tip   ignore  

I get rather annoyed when I see stories like this one:

http://www.latimes.com/business/la-fi-renters-nightmare-20120506,0,7137775.story

I don't know where they are getting their data, but a simple graphing of 15,470 rental prices in LA Craigslist postings show no increase at all over the last year:

There is just no way on earth you can truthfully claim rents are "soaring" in LA.

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1   Tom Stone   2012 May 6, 5:43am  

Just like claiming home prices are up in the "Bay Area' all you have to do is be selective about which cities and neighborhoods you include.

2   FortWayne   2012 May 6, 6:16am  

A lot of old folks who are renting their condos out and investors who are doing just the same, competition is a very good thing.

3   bubblesitter   2012 May 6, 6:24am  

My rent for a 2 bed room place in 2008 was $1450(+gas+water). Now I am at $1365(-gas-water,slightly better then old place) just 1 block away from my old place and the rent is same for last 4 years,so I am saving $120/month then my old place 4 years ago - on the ground report. I am in Socal. :)

4   SJ   2012 May 6, 12:25pm  

socal is a lot cheaper than the bay area. I lived close to the beach in San Diego before moving to Mountain View.

5   Goran_K   2012 May 6, 12:38pm  

I'm renting a 3/2 house (driveway, backyard, etc) for under $2,000 (the person who rented it before me paid $2,300 for 2 years). Rents haven't been like this in my area for a long time.

6   Rental Watch   2012 May 6, 5:20pm  

Tom Stone says

Just like claiming home prices are up in the "Bay Area' all you have to do is be selective about which cities and neighborhoods you include.

I moved into the home I previously rented on the mid-Peninsula (SF Bay Area) in 2004. The market was pretty tight then. The landlord only raised my rent by approximately 10% cumulatively over the next 7 years. We then bought a house about a year ago. The landlord raised the rent by 30%, and rented the house within a day. This rent is the highest I think he has ever gotten for the house (the prior tenant leased during the dotcom boom and confided in us what they paid before they got it reduced after the dotcom crash).

Don't select the mid-Peninsula if you want low rents.

7   BoomAndBustCycle   2012 May 6, 5:52pm  

I've lived in Los Angeles for 10 years now and rents are absolutely at an all time high. They dropped briefly in the summer of 2009, but having bounced back since. I have lived in 4 different apartments and now a house. Are some people living for cheaper... Sure, but they are the exception to the rule. Craigs list is not the best barometer for rents. A better barometer is to looke at what the big management companies are charging. Their rates are published monthly and are far more accurate than craigs list. The big management companies also do not negotiate on price as often... They just offer 1 month free rent specials. So the published rates are very accurate judge of the rental market.

8   xenogear3   2012 May 6, 8:08pm  

BoomAndBustCycle says

Craigs list is not the best barometer for rents. A better barometer is to look at what the big management companies are charging.

This is like saying Best Buy's price is more accurately than Amazon's.

I noticed that Best Buy has very few on sale items recently.
It seems give up to compete with online stores.

9   StoutFiles   2012 May 6, 10:14pm  


I don't know where they are getting their data, but a simple graphing of 15,470 rental prices in LA Craigslist postings show no increase at all over the last year:

I normally agree with you Patrick, but a relatively small sampling of data from one source doesn't tell the whole story. Rents are likely increasing due to all the talk about the economy being fixed now. Of course, it's not, and rents will fall again, but for now they're probably up 10%.

10   marcus   2012 May 6, 10:37pm  

StoutFiles says

Rents are likely increasing

No. It's propaganda. But maybe it can work for a while.

StoutFiles says

Of course, it's not, and rents will fall again, but for now they're probably up 10%.

http://articles.latimes.com/2011/nov/27/local/la-me-california-move-20111127

Nope.

People have been leaving. When unemployment is high, and people are leaving, and rents are already fairly high, I guess they think all they need is a little marketing.

11   StoutFiles   2012 May 7, 2:45am  

marcus says

No. It's propaganda. But maybe it can work for a while.

Of course it is. Publish that things are great long enough and people start buying into it. Reality will set in come 2013 when nothing is better and elections are over.

marcus says

People have been leaving. When unemployment is high, and people are leaving, and rents are already fairly high, I guess they think all they need is a little marketing.

That article is a little old. The reality currently is that less homes are on the market as sellers think the market is so close to turning the corner, and the banks are still hiding their inventory. Less homes for sale equal higher rents.

The roller coaster is going down but like any coaster there are some small trends back upward every so often. In the big picture though, we are still going down.

12   BoomAndBustCycle   2012 May 7, 8:40am  

xenogear3 says

This is like saying Best Buy's price is more accurately than Amazon's.

I noticed that Best Buy has very few on sale items recently.
It seems give up to compete with online stores.

I don't think that is an accurate metaphor... But, I kinda of get where you going with it. I would think the big management companies would have the pricing power of WALMART vs. Best Buy. The little mom and pop landlords can't compete as well against the BIG management companies that can undercut them. The problem with the whole analogy is the management companies cater more to the luxury rental market. So, prices are skewed higher.. But the percentage increases each year still depend on supply and demand.

(Also, on a side note: Amazon may not be as successful after they start having to charge state sales tax in states like CA... Recently I've noticed Best Buy prices are very comparable to Amazon.. until you factor in the 10% Cali State tax... so people go online and save 10%. Once that free ride ends.. (I think as soon as this summer... you may see shopper stay and buy at Best Buy rather than using it solely as a show room for their big purchases).

13   FuckTheMainstreamMedia   2012 May 7, 2:44pm  

BoomAndBustCycle says

I've lived in Los Angeles for 10 years now and rents are absolutely at an all time high. They dropped briefly in the summer of 2009, but having bounced back since. I have lived in 4 different apartments and now a house. Are some people living for cheaper... Sure, but they are the exception to the rule. Craigs list is not the best barometer for rents. A better barometer is to looke at what the big management companies are charging. Their rates are published monthly and are far more accurate than craigs list. The big management companies also do not negotiate on price as often... They just offer 1 month free rent specials. So the published rates are very accurate judge of the rental market.

What on earth are you talking about?

Those big management companies absolutely do NOT report concessions in their public rent amounts. Those numbers are insanely deceptive.

14   the cave dweller   2012 May 7, 10:02pm  

Deceptive employment numbers, real estate statistics, inflation percentages, & on & on ... No one believes anything these clowns dish out anymore. Be like the Buddha and just "see" for yourself - reality & truth are there for anyone to experience.

15   OW   2012 May 7, 11:58pm  

In one of the great South Lake are of Pasadena. Started renting a townhouse for $2k/month 3.5 yrs ago. Reduced to 1900 2.5 yrs ago. Reduced to 1750 1 yr ago. After major water pipe leak 2 months ago, 1 month rent forgiven. Why? The empty place next door just lowered his rent to $1700/month. But i'm willing to pay $50 more so I can go month to month and can move whenever I want. I don't know how the majority of people still believe the lies.

16   ArtimusMaxtor   2012 May 8, 12:02am  

I'll say it again they "fix" rental prices by comps. Some might say hey ask what you want. Realtors were once again along with licencing introduced into real estate. Once again it is the one place people actually "trade" with one another. Thats really rare. There may be a few places. But actually thats not really a factor. Maybe for me of course and very few others. Not a lot of people consider the Rental market is arrived at value by a Realtor the same as the Residential real estate market and the CRE market. Once again price is determined as much as they can make it so by their data. In approximation of their NEW BUILDS thats what they go off of thats the real underbelly of all of this. The real, real underbelly is of course loans. They want real estate expensive. See. The more the loan amount the more delicious they make it for everyone. They want you in debt your time your labor for all your years. That includes the bag of dog food and the rubber bone they give you at the end of your life. Retirement is a differnt kind of "ownership" of course. However you will still be pumping steam for them to your last day believe me. It can be scary for an old person of course when you get out of line. They just might take your tuna fish away. It's really not funny of course. Oh you will become a real believer in their "benevolence" at that point. All because you don't know what to do.

17   LARenter   2012 May 8, 12:26am  

I can confirm that rents are definitely down all over LA. They're dropped in my westside building, and asking rents in my neighborhood are lower today than they were in 2008 by about 10%. I'm sure that if you cherry picked brand new developments and took the reported price from the managers you could come up with a "rents rising" scenario, but it's just not the reality on the street.

18   WestHollywoodRenter   2012 May 8, 2:46am  

Anecdotal evidence from West Hollywood. In 2006, we had been looking for a while and eventually found a mediocre 2 bedroom for $1900 (and felt lucky to get that because many others had applied). During the 2009 crash, we noticed a lot of for rent signs, far more than we had seen before. We started looking around and found a SIGNIFICANTLY better apartment for the same price (and one month free)--2 side by side parking spots, a few hundred square feet larger, a renovated kitchen (with granite and new appliances), and a fantastic view of the Hollywood Hills. Now, the apartment below us (the same in all respects except the view is not as good) just rented for $2300. I'd say we were lucky to rent when we did (and it's rent controlled even better).

19   KMAC   2012 May 8, 3:05am  

I just signed another year lease for the same house I've rented in Culver City for the past 3 years (so this is year 4). I paid $3,000 for the first two years and $3,100 last year and this year. The house and comparable houses would probably sell for about $800,000 and need updating. Still feel like renting is a great deal here. If I bought 4 years ago, the comparable houses would have been about $850,000.

20   cw   2012 May 8, 3:15am  

Rents are up in most places. It stands to reason that more people are renters so there is more demand for rentals. The rental market was down during the housing boom of 2004-2006 when many renters bought homes. Now that trend is reversing. As I have said before Patrick.net readers have become a group of housing haters that will never admit when it is starting to turn in the other direction. The housing market like the stock market and the price of oil and is constantly changing. Yes, it was crazy to buy during the inflated years but things have changed. It seems like alot of renters with no experience buying or selling homes are somehow experts in the housing market on Patrick.net.

21   Hysteresis   2012 May 8, 3:54am  

carolinefpf says

. As I have said before Patrick.net readers have become a group of housing haters that will never admit when it is starting to turn in the other direction.

home owners are usually the most ignorant. no homework, no idea what the market is like, spewing baseless speculation as conclusions. mindlessly repeating cliche and conventional wisdom without asking if it makes sense or not.

if you read the comments by bulls and bears. the bulls are often less informed and almost always less rational.

22   BoomAndBustCycle   2012 May 8, 4:42am  

LARenter says

I can confirm that rents are definitely down all over LA. They're dropped in my westside building, and asking rents in my neighborhood are lower today than they were in 2008 by about 10%. I'm sure that if you cherry picked brand new developments and took the reported price from the managers you could come up with a "rents rising" scenario, but it's just not the reality on the street.

I don't know what ghetto part of Inglewood you live in.. But rents are not down all over LA in desirable neighborhoods with good commutes to jobs. I have a friend who is forced to move from his rental in Burbank, due to the condo owner selling the place. He's looking in the nice parts of the San Fernando Valley for 3 months now everyday and he's about to settle on a $1850 a month 2 bedroom in sherman oaks. (And he thinks it's a pretty sweet deal!) I'm not talking about ultra luxury here.. Just simple amenities like washer/dryer in unit.. some decent square footage 1000+... and some private outdoor balcony space for BBQ ect.

I'll believe my friend whose been looking everyday for 3 months for a longterm rental... vs. someone on this blog doing a few cursory searches on craigslist about the rental market in Los Angeles.

Sure you can find cheaper rent in a noisy, paper thin walled, less desirable neighborhood apartment with shared laundry. But if you want to live like a "grown up" you have to pay out the ass for a decent place anymore.

23   BoomAndBustCycle   2012 May 8, 4:45am  

WestHollywoodRenter says

I'd say we were lucky to rent when we did (and it's rent controlled even better).

Yep, you lucked out! Summer 2009 was the bottom for rents in Los Angeles for this recession.

24   FuckTheMainstreamMedia   2012 May 8, 4:46am  

^^^^

Stop lying and making up things realtor.

25   BoomAndBustCycle   2012 May 8, 5:27am  

John Bailo says

Thanks for exposing all these "Rents Rising" articles peppered in the newspapers.

They are completely unfounded and if anything, I would expect the Rent Bubble to burst quite soon.

You realize you just totally contradicted yourself in 2 sentences.

So you just admitted there is a "Rent Bubble", yet applaud the commentators for "exposing" the falseness of the articles stating rents are at all-time highs and rising?

ok.........?

26   David9   2012 May 8, 5:47am  

In my opinion, and I have lived here in Southern California since 1987, the only rents that are rising are from the corporate moguls like this corporation. Here, 1 bedrooms go for $1,725 to $2,520 and they are popping up all over the city like CVS Pharmacies. Any simply query on Craigslist or other rental sites will show lower prices. ALL have availability.

http://imtresidential.com/aboutus

http://www.imtresidential.com/IMTEncino#View

Also, able to validate, people have moved out of California, further pushing the availability of apartments.

27   BoomAndBustCycle   2012 May 8, 6:26am  

David9 says

Any simply query on Craigslist or other rental sites will show lower prices. ALL have availability.

It doesn't make sense though. Why would anyone rent from IMT or the big management companies if they are SO overpriced compared to your craigs list queries?

Craigs List is full of scams... it's like wading through a landfill to find anything that isn't crap.

I just contacted one of the low priced rentals in encino people on here are quoting as examples of cheap rentals. It was listed for $1350 for a 2bed/1bath house with a yard. Of course no address was given, just a phone number. I emailed the reply ad and I'll let you know if what I'm positive is a scam is as such.

28   David9   2012 May 8, 6:35am  

BoomAndBustCycle says

Craigs List is full of scams...

Agree. But they are available, lower priced apartments.

Here, there are 1,144 available apartments in the San Fernando Valley from $1,000 to $2,500.

http://www.westsiderentals.com/guestsearch-results.cfm?region_ID=9&priceLow=1000&priceHigh=2500&property_type_id=0%2C12%2C13%2C8%2C9%2C10%2C20%2C21&searchType=g#pagenum=1

Another example, I like these apartments for $1,500, but I have a perfectly fine apartment for $1,000, it's not worth 50% increase in rent to me.

http://www.equityapartments.com/bbrochure.aspx?PropertyId=2358&utm_source=google&utm_medium=cpc&utm_campaign=losangelesproperties_versailles&s_kwcid=TC%7c4015%7cversailles+woodland+hills%7c%7cS%7cb%7c9017383393

As to why someone would pay $1,725 to $2,520 when other options are available. I do not have a clue.
http://www.westsiderentals.com/guestsearch-results.cfm?region_ID=9&priceLow=1000&priceHigh=2500&property_type_id=0%2C12%2C13%2C8%2C9%2C10%2C20%2C21&searchType=g#pagenum=1

29   BoomAndBustCycle   2012 May 8, 6:49am  

David9 says

Craigs List is full of scams...

Agree. But they are available, lower priced apartments.

I'm not saying there aren't cheap apartments by any means. But a suitable rental narrows down quite a bit once you NEED a minimum of 2 bedrooms, a washer/dryer in unit, one that allows a dog, and has some outdoor area to bbq and play with the dog. Also I prefer not to have 4 shared walls.. so a corner unit or townhouse is preferable... ect...

Once you add those fairly normal "wants" to the list.. Your prices shoot up to $1700 MINIMUM for a 2 bedroom in a decent area. At that point your approaching rental parity fast, and could buy a SFH in a neighborhood like Northridge, Reseda, Granada Hills, Lake Balboa ect for a very similar monthly nut.... (adding at most 10-15 minutes to your commute had you rented in Encino.)

30   zesta   2012 May 8, 6:53am  

Back in 2006/2007 many housing bulls would respond to articles/stats about how housing prices were trending downward called the articles "propaganda and lies" or had anecdotal stories of how their neighbor sold for xxx,xxx more than the median, or how only brand new construction was heading down.

Now the same kind of quotes are coming from renters when stories about rents increasing are coming out.

I guess it's human psychology at work.

31   David9   2012 May 8, 7:16am  

BoomAndBustCycle says

Once you add those fairly normal "wants" to the list.. Your prices shoot up to $1700

Agree. I should mention, I am only a guest on westside rentals, so I cannot search for a particular city and these are usually, a bit older, small complexes, and not the apartments to be found on other apartment websites like rent.com. They are different. So, these can actually be added to the next example, even though I cannot get an exact figure.

Below, there are 294 apartments in Encino alone! At least 2 bedrooms 2 bath from $1,200 to $2,000. Go up to $2,500 same criteria, 413!

http://www.rent.com/search/results/?old_mode=results&old_state_nb=19&old_submarkets=&old_minimumrent_at=1200&old_maximumrent_at=2500&old_bedroom_nb=2&old_bathroom_nb=2&old_dogscats=0%7C0&old_freeform_submarket_nm=Encino&old_topsubmarket_nb=31417&combined_location_field=Encino%2C+CA&minimumrent_at=1200&maximumrent_at=2000&bedroom_nb=2&bathroom_nb=2&combined_location=1&dogscats=0%7C0&propertykeywords_nm=&moresearchoptions=1&supdateprofile=1&toggleSearchBtn.x=45&toggleSearchBtn.y=14

So, where is this rental crisis? Guess that is my point.

32   David9   2012 May 8, 7:26am  

Correction on that listing above, the 30 pages goes out much farther than Encino.

33   Shaman   2012 May 8, 8:29am  

Craigslist IS full of scams, but it's also how I found the house I'm living in now. Landlord has been a real peach, and the place has met all our needs for three years.

34   DUKE 201   2012 May 8, 8:40am  

Paid $2,300 in Santa Monica (2bd,2ba - 950sqft - new bldg) from Oct 10 - Oct 11. Now pay $2,740 from Oct 11 - Oct 12 in same apartment. Pretty sure that rents have increased and that your data doesn't provide full picture.

35   joelnpayne   2012 May 8, 9:14am  

I just moved down to Tustin (right next to Irvine). My wife and I have perfect credit and I'm working a job that supports the rent easily. It took us SEVEN tries to land a rental house because so many of them were getting snapped up before we could even get the paperwork in.

I take zillow with a big grain of salt but their rental price estimates were damn close to what we found actual asking prices to be (at least with my sample size of 7 homes in a decent middle class neighborhood). Zillow estimated that rental prices in Tustin were up $200 year over year.

I'm paying $2500 a month for a 4 bed home that's worth about $430k (and it's in a housing development so there are MANY close sales comparables to chose from). These days a mortgage would actually be cheaper -- at least before maintenance -- but that's the first time I've seen that in the LA area in a long long time.

My 0.02: the rental market is screamin' hot if you're looking at locations where you actually want to be... Maybe they're down in the outlying areas because less folks want to commute. I'm not sure.

36   FuckTheMainstreamMedia   2012 May 8, 11:44am  

joelnpayne says

I'm paying $2500 a month for a 4 bed home that's worth about $430k (and it's in a housing development so there are MANY close sales comparables to chose from). These days a mortgage would actually be cheaper -- at least before maintenance -- but that's the first time I've seen that in the LA area in a long long time.

Curious.

I just ran a searchon Redfin for 4 bedroom homes sold in Tustin over the past 3 months with a max price of $450K and no other parameters. Not a single one was in a housing development.

Actually, throughout the entire city of Tustin, there were only 12 homes sold with those parameters over the 3 month period.

Not that I'm calling bullshit or anything.

37   FuckTheMainstreamMedia   2012 May 8, 11:45am  

DUKE 201 says

Paid $2,300 in Santa Monica (2bd,2ba - 950sqft - new bldg) from Oct 10 - Oct 11. Now pay $2,740 from Oct 11 - Oct 12 in same apartment. Pretty sure that rents have increased and that your data doesn't provide full picture.

Aren't apartments in Santa Monica rent controlled?

38   FuckTheMainstreamMedia   2012 May 8, 11:54am  

zesta says

Back in 2006/2007 many housing bulls would respond to articles/stats about how housing prices were trending downward called the articles "propaganda and lies" or had anecdotal stories of how their neighbor sold for xxx,xxx more than the median, or how only brand new construction was heading down.

Now the same kind of quotes are coming from renters when stories about rents increasing are coming out.

I guess it's human psychology at work.

Urban metro had not begun to fall in 2006, and many areas hadn't begun to fall in 2007. So statistics wouldn't jive with all areas.

Same thing now. Places like Phoenix legitimately have bottomed. Parts of metro California are not even close.

Look, if you have a huge lists of NEEDS on your rental, you might as well drop your shorts and hope someone has some lube. If not, you can get a very inexpensive rental compared to apples to apples purchases in a LOT of areas of LA County, including the most desirable places. My current rental at $1640/mo would cost $300K to purchase + $620HOA + $100 parking.

This all of course does not even discuss the current lack of inventory in LA County available for purchase. And personally I'd much rather rent a place I wasn't totally happy with for a year or three rather than mortgage a place I wasn't totally happy with for the next 10, 15, 30, or more years.

39   TMAC54   2012 May 8, 2:09pm  

I would wager this exodus will show us a significant cause of increase in vacancy factors. Now if we could just dupe those financial institutions into buying the millions of foreclosures and put them out as rentals, we will see some realistic pricing.
http://www.cis.org/IllegalImmigration-ShiftingTide


IR AL SUR DE MI HIJO !

40   m1ckey6   2012 May 9, 6:51am  

We have moved annually in LA for four years. We have read the "rents are soaring!" stories for at least three. Our experience has been eager landlords, low security deposits and negotiable rental prices.
If the market was tight it doesn't make sense that landlords would be willing to drop their advertised rent.
We have lived in a variety of places: mid market, ok neighborhood apartment; fancy apartment, premium neighborhood; and our current place is a house in a middle class area. Our experience has been the same.
Some rent controlled areas the landlords are willing to put a huge rental price up and keep the apartment empty until someone dumb enough to pay it comes along.
I deal with a wide selection of LA society every day and they chat to me about everything. I've lost count of the number of complaints I've heard about parking tickets going up but I have yet to hear a single complaint regarding rising rents.
Rental rates soaring makes as much sense to me as the stories constantly saying that the economy is great in CA now.

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