What's behind the recent drop in rent prices?

While Los Angeles County might be one of the most expensive places to live in the United States, rent prices have dropped steadily over the last four months, a trend noticed across nine of California's 10 most-populated cities. 

After a period in which rent prices skyrocketed consistently from year to year, the change might not seem like much to many renters, but a new study from ApartmentList suggests that the trend could continue through 2023. 

The city with the largest drop in rental prices was Oceanside, where in December, prices dropped by nearly 4%. In Los Angeles and Long Beach, there was a 1% drop. 

Anthony Lopez, a realtor with RE/MAX Vision, says that the drop comes from a combination in more homes on the market and more units for rent than there are prospective renters. 

"It's about proactive landlords that are recognizing the loss that they're having by keeping the property vacant," he said. "A lot of them have a lot of equity right now and they refinanced while the rates were low. So, would you rather take $200 less in the mortgage and have your property vacant, or be paying your mortgage?"

On top of all of this, there are a number of additional factors pushing people to consolidate households. 

"Pandemic, inflation, cost of living," Lopez said. "I remember last year I was helping a client with a lease and there were at least 30 applicants. Now, you got some that aren't getting any applications."

While the price drops won't apply to current renters already locked into a lease, Lopez says new renters can try and find better deals by asking landlords — but in the long run it will depend on their level of desperation in filling their property. 

It's unclear how long the downward trend will continue, but many hope it continues until prices fall to a more affordable price range, especially with the end to the eviction moratorium looming.