New Los Angeles apartment developments drive rental prices down, study finds

If you're looking to rent across Los Angeles, you might be seeing more listings, more deals, and maybe more room to negotiate. 

It's all part of a recent trend, supported by data and by real estate experts who said the rental relief is real but comes with some perspective. 

For the first time ever, LA is no longer one of the 10 most expensive cities in the country for renters, according to a new report from rental platform "Zumper," which tracks data from over 1 million active listings.

One-bedroom rents in LA are down 3.5% this month, settling at $2,210. Two-bedroom rents dropped 2.6% to $3,030. Both options are down nearly 4% compared to this time last year.

Zumper cited an influx of new supply as the main reason for the drop in rent. The company said more than 12,000 new apartment developments are scheduled to hit the market this year. According to Realpage Market Analytics data, it's the largest influx of new supply volume ever recorded for the city. 

Residents like Josh Loree and Tara Lee, who moved from Michigan more than five years ago, know firsthand what it's like to compete with others for a place to rent. 

"It was an intense process," Loree said. "You have to be so quick if you find a spot, you have to jump on it immediately."

Lee added that she had to get her applications in quickly if she wanted a shot at an apartment. 

"I viewed so many different apartments and applied for so many, and usually by the time I was done viewing it and applied, it was already snapped up," Lee said. 

However, the pair added that the broader cost of living in LA remains a real problem, even though they make more than peers in other areas of the country.

"It's still a much bigger burden income-wise than it probably would be if we were still in Michigan," Loree said. "In fact, I can get rid of the 'probably.' It definitely is."

Realtor Media Moussavy oversees one of LA's largest luxury rental groups. He said across the board, the market has changed, but perspective still matters. 

"Rents were in a different place than they were until you had the COVID dip, and then you had everything skyrocketing high, and now they're pretty much flat to back where 2019 was," he said. 

Right now, Moussavy said landlords are trying to fill units, even if it means offering incentives like waived fees or a month of free rent.

"Incentives are definitely a name of the game right now," he said. "That's something that you have to do now to be able to land the rents. Because, you know, there isn't a line out the door as much as there used to be."

Loree, who also works for a commercial architecture firm that builds multifamily housing, believes the problem goes deeper than rental prices alone. 

"There needs to be things done from a systemic perspective to make it easier to build housing," Loree said. "And then it also needs to, there needs to be incentives for not just affordable housing, but also mid-market housing."

Moussavy agreed that the structural issues run deep, but believes that developers are not rushing to add more supply anytime soon.

"You have high interest rates. It's not exactly the best economy," he said. "The demand is lower. So that's the perfect storm for a developer to say, 'I'm going to just stay back right now and watch what happens.' And I agree with it."

Experts believe the drop won't last, with home prices roughly 50% more per month than rentals. The difference will push more would-be buyers into the rental pool.