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Santa Monica Rents Drop Nearly 13 Percent, New Report Finds

Bob Kronovetrealty
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Santa Monica

Santa Monica Apartments

Santa Monica College
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Santa Monica, CA 90405
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By Jorge Casuso

December 3, 2020 -- Rents in Santa Monica dropped by nearly 13 percent over the past year, as the coronavirus shutdown hit high-priced cities with high-tech work forces the hardest, according to a report by Apartment List.

Median rents in Santa Monica stand at $1,857 for a one-bedroom apartment and $2,336 for a two-bedroom, a drop of 12.5 percent since this time last year, according to the online rental site's December 2020 National Rent Report released Tuesday.

The year-over-year drop in rental prices -- with rents falling every month since February -- is steeper than the 5.2 percent average decrease for California and the 1.3 percent average decline nationwide.

Santa Monica's drop mirrored that of other cities with the nation's most expensive rents, such as San Francisco, Seattle, Boston and New York, all of which saw rents drop by more than 10 percent over the last year.

Like Santa Monica, these cities "have a high share of their workforces employed by the sorts of companies that are quick to embrace remote work," according to the report.

"No longer needing to be close to the office, and with many local amenities still closed, some of these workers may be questioning their choice of location," the researchers found.

"Furthermore, workers who have been laid off or furloughed in these cities likely have little buffer to continue affording sky-high rents."

As a result, demand has softened, triggering "some of the sharpest rent dips on record in these cities," the report said.

San Francisco, the most-expensive city in the country, saw rents plummet by 24.5 percent since March, with the median 2-bedroom apartment in San Francisco dropping from $3,147 to $2,377.

Seattle ranked second with a 19.1 percent drop in rental prices since March, followed by Boston, New York City and San Jose, according to the report.

While the economic fallout from the COVID-19 pandemic hit expensive markets the hardest, smaller markets -- such as Boise, Idaho, which has seen a 9 percent increase since March, and Central California -- are growing more expensive.

"As the priciest cities lose some of their allure, interest in more affordable mid-sized cities appears to be picking up, potentially driven in part by renters taking advantage of remote work arrangements," Apartment List researchers found.

Still, many of the cities with the fastest rent growth "are still within commuting distance of larger job centers."

Rental prices are seeing a typical dip as winter approaches and fewer people move, with prices falling by 0.5 percent this month, "which is consistent with what we’ve seen in the past," the report found.

But the pandemic has likely left a long-lasting impact on the rental market.

"There is evidence that a growing embrace of remote work will outlast the pandemic, which could significantly alter the housing choices of workers in these flexible arrangements," the researchers concluded.

Apartment List Rent Report data is drawn monthly from the millions of listings on the site, according to the website.

The report calculates 1-bedroom and 2-bedroom rents as the median for units available in the specified size and time period. The site's new methodology aims to identify transacted rent prices, as opposed to the listed rent prices.

To view the full report click here

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