Nearly one-third of California rentals offer discounts, though landlord generosity – or desperation, depending on one’s view – is higher elsewhere in the nation.
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My trusty spreadsheet reviewed a report from real estate tracker Zillow that examined rent pricing patterns in April across 50 large metropolitan areas, including six in California. Zillow tracked discounts by tallying units listed for rent on its online platform that offered concessions.
Let’s ponder California price cuts, as measured by the six-county median of Zillow’s finds, and compare those patterns with nationwide trends.
It’s not too difficult to find California landlords who’ll offer discounts – the six-metro median share is 31% – and that’s up from 28% a year ago.
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But nationally, 40% of landlords offer concessions, up from 35% a year ago.
And dealmaking is not uniform across the 50 metros. Concessions range from 68% of Denver’s units to 11% in Buffalo.
Why offer deals? Well, many landlords face numerous challenges in filling empty units.
Folks who can afford today’s lofty rents are a limited group, especially when the job market’s a tad wobbly. And a wave of new construction – far larger outside of California – creates more competition for new customers. So concessions, often a month or more of free rent, are used to lure in renters.
Sadly, all this dealmaking for new clients hasn’t cut what the typical California renter pays, according to Zillow’s rent estimates, which include apartments and houses.
The median overall rent across the six metros was $2,903 per month in April – 50% above the national norm of $1,930. That’s up 2% in the past year, both statewide and nationally.
Big split
When pondering the six metros, there’s a clear split: Bay Area vs. elsewhere in California.
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The Bay Area rental market, boosted by renewed tech spending, is seeing concession levels fall and rents rise sharply.
Here’s how discounting varies across six California metros, ranked by the share of units with concessions:
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– San Diego: 38% of units offer concessions (No. 26 of the 50 big metros), up 7 percentage points in a year (No. 15 biggest move) – with rents of $2,914 monthly (fifth-highest) after a 2% one-year gain (No. 27 increase)
– San Jose: 33% with concessions (No. 30), off 7 points in a year – the second-biggest drop – with rents of $3,534 (highest in nation) after a 5% one-year gain (No. 4 increase).
– Sacramento: 32% with concessions (No. 31), up 4 points in a year (No. 30 move) – with rents of $2,258 (10th highest) after a 2% one-year gain (No. 25 increase).
– Los Angeles and Orange counties: 31% with concessions (No. 33), up 4 points in a year (No. 32 move) – with rents of $2,892 (sixth-highest after a 1% one-year gain (No. 30 increase).
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– Inland Empire: 29% with concessions (No. 37), up 3 points in a year (No. 37 move) – with rents of $2,510 (eighth-highest) after a 2% one-year gain (No. 23 increase).
– San Francisco: 27% with concessions (No. 39), off 8 points in a year – the biggest drop – with rents of $3,206 (third-highest) after a 7% one-year gain (largest increase).
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]
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