Southern California renters are winning more concessions when they sign new contracts, an indication that surging apartment construction is easing the supply squeeze, according to Zillow.
Zillow said the share of US listings on its platform that offered such concessions topped 33% last month, up from 25% a year earlier. The real estate tracker’s July rent report shows:
San Diego: $2,795 typical rent, up 0.1% in a year with 34.3% of landlords offering some sort of concessions vs. 21.9% a year ago.
Los Angeles-Orange County: $2,751 rent, up 2% in a year, with 30.2% of landlords offer concessions vs. 27.4% a year ago.
Inland Empire: $2,345 rent, up 2.2% in a year – but only 19.1% of landlords offer concessions vs. 17.4% a year ago.
Some 60,000 multifamily units were completed nationwide in June, more than any month in the past 50 years, according to Zillow. That’s pushing owners to offer concessions which range from parking privileges to weeks of free rent.
“Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits,” said Zillow Chief Economist Skylar Olsen. “A slowing job market and lower mortgage rates could mean falling rents if the current trends hold.”
Concessions varied for the month of July.
Where they’re up: In 25 major metro areas, with largest jumps in Birmingham, Louisville, Oklahoma City, San Jose and Portland.
Where they’re down: In 24 major metro areas with the largest monthly drops in St. Louis, Kansas City, San Antonio, the Inland Empire, and Baltimore.
Housing has been one of the main contributors to post-pandemic inflation, and further improvement in rental supply should help bring headline rates lower and bolster the Federal Reserve’s case for lower interest rates. Nationwide shelter inflation eased to 5.4% in June, from a peak above 8% last year.
The number of multifamily units under construction hit a record last year. While it’s retreated since then, the June figure was still higher than any time since the early 1970s.
Jonathan Lansner of the Southern California ɫ̳ Group added to this report.
