California Markets Record Nation’s Steepest Rent Cuts

Large California apartment markets were responsible for the nation’s steepest rent cuts in May. With the recent economic downturn, less than half of the 50 largest U.S. apartment markets are still seeing rent growth, while 27 markets are now cutting prices. The nation’s worst pricing performances were in the three Bay Area markets, and in Los Angeles. San Francisco saw rent cuts of 4.9%, San Jose posted a decline of 4.4%, and Los Angeles and Oakland each recorded cuts of just over 3%. For all four markets, these are the steepest price declines seen since early 2010. Meanwhile, operators in both Anaheim and San Diego cut rents by 0.6%, about in line with the national average. The only major California markets still seeing rent growth are Sacramento (1.5%) and Riverside (2%). In all cases, however, these markets have seen major setbacks. Looking back, all major California markets were growing rents between roughly 2% and 5% in May 2019.