The good news is that rental prices are leveling off
It’s no secret that Los Angeles rental prices are some of the highest in the nation, but a new analysis from HotPads, a rental database owned by Zillow, illustrates just how much tenants collectively spend on housing each year.
According to the report, renters in the LA metropolitan area, which includes Los Angeles and Orange counties, paid $40.4 billion in rent during 2018. By comparison, that’s more than 423 of the companies on the most recent Fortune 500 list earned in yearly revenue.
Los Angeles was second only to New York in terms of total rent paid, and Angelenos accounted for an astonishing 12 percent of the $504.4 billion spent on monthly rent in the United States during the past year.
LA tenants coughed up around $1.9 billion more in rent during 2018 than the year before, according to the report. But if recent trends continue, local renters may see costs level off a bit in the year to come.
Within the city of Los Angeles, prices dipped slightly in December, according to a separate report from Apartment List. The median cost of leasing a one-bedroom apartment was $1,360 during the month, down from $1,370 in November.
Two-bedroom prices also dipped slightly during the month. They dropped to $1,750, after sitting at $1,760 since late summer.
Those prices are still up since the same time last year, but only by about 1.5 percent. That’s about half the yearly increase allowed under the city’s Rent Stabilization Ordinance, suggesting that LA’s competitive rental market has cooled off significantly since the beginning of the year.
But those numbers only tell part of the story.
Apartment List bases its calculations on U.S. Census data, giving a decent idea of what Angelenos are paying for rent right now. Meanwhile, real estate analyst CoStar uses active listings to get an estimate of what prices those looking for a new apartment are likely to find when searching online.
According to CoStar, the average price of a one-bedroom in Los Angeles County was $1,703 in December. Two-bedroom apartments commanded prices of $2,166. Each of those figures represents an approximately 3 percent increase over a year earlier, but prices have barely budged in the second half of the year.
Between July and the end of the year, prices for both one- and two-bedroom units rose less than a percentage point.