While it may not surprise local residents, Eastern Los Angeles, a real estate market area that includes Pasadena, has seen the largest year-over-year jump in rental competitiveness, soaring from 25th place at the start of this rental season to ninth place in the U.S., according to a new report from rentcafe.com.
The report said this dramatic rise is primarily due to a sharp increase in lease renewals—from 42.1% one year ago to 52.7% now.
The recent report noted, “With an occupancy rate of 95.8% and the local supply of apartments not increasing in the past few months, renters have very limited options to choose from. As a result, each vacant apartment in Los Angeles, Long Beach, Pasadena and the surrounding areas attracts as many as 14 prospective renters, on average.”
The area’s limited supply situation is also driven by a surge in lease renewals, with 52.7% of renters choosing to stay put at the start of the 2024 rental season, up 10.6% from one year ago, said rentcafe.com.
This resulted in a Rental Competitive Index (RCI) score of 78.5 for Eastern Los Angeles, surpassing both the national average of 73.4 and the Golden State’s average of 72.6, according to rent cafe’s Rental Market Competitiveness Report.
The report also pointed out that the U.S. rental market is experiencing slightly less strain at the start of this moving season compared to one year prior, still feeling the effects of the influx of new apartments introduced in recent years.
Notably, the supply of apartments increased by 0.61% since January, which is in line with one year prior, said the report. Also, it noted, close to 29% of the 137 markets analyzed are showing signs of softening, often with longer vacancy periods and more lease renewals.
More precisely, 62.4% of apartment dwellers chose to stay put at the start of the moving frenzy — likely because they’re still unable to make the switch to home ownership. This compares with 2023, when fewer renters decided to sign lease renewals (59.7%) because they had fewer options to choose from at that time, said rentcafe.com.
This marked increase in the lease renewal rate, the report pointed out, is primarily due to more and more renters getting better deals and incentives when they renew. Renters are also signing longer leases, said the report. This helps property managers keep their buildings full despite new apartments opening in the last two years.
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