Pasadena rents have declined steadily since the start of the pandemic, currently representing the 10th highest in the Los Angeles Metro area, down from 7th highest in April, according to a new report.
The average rent for a one-bedroom apartment in Pasadena dropped by $240 over the course of the pandemic, according to analysis released this week by the real estate marketplace Zumper.
Prior to that, it had been even higher, Zumper analyst Crystal Chen said.
“Pasadena one-bedroom rent was consistently priced above the $2,100 threshold until April 2020 when it started a steady monthly freefall, reaching its lowest point on our latest November metro report at $1,850,” she said.
The decrease amounted to a 6.1% drop in October, compared with last year, according Zumper.
The average cost of renting a two-bedroom apartment in the city had decreased to $2,640, representing a 10.8% drop compared with the previous year, the report found. Although October saw a 1.5% uptick in two-bedroom rental prices from September
With more people watching their budgets, as well as working from home instead of commuting, renters’ priorities have changed in recent months, Chen said.
“After the pandemic hit in March, we’ve seen a general trend of renters leaving pricier areas in favor of cheaper markets,m” she said. “As many are working from home indefinitely, the priorities of renters have shifted away from big-city amenities to more space and affordability.”
“Renters would prefer to have things like an outdoor area or an extra office to ride out the rest of the pandemic,” Chen said. “This trend can be seen in the L.A. metro as well as the pricier cities, like Pasadena, which has decreasing year over year prices while some of the most affordable ones like San Bernardino, Hawthrone, and Murrieta have year over year rent price growth between 5% and 10%.”
Chen said she didn’t expect the trend to reverse in the immediate future.
“As we are heading into the cooler months of the year and this tends to be the slow-moving season, I expect rents to continue to fall as rental demand generally dips during the holidays and I expect landlords to continue to price down their units to try and fill vacancies faster,” she said.
Pasadena realtor Adam Bray-Ali, who owns several rental properties, said he’s noticed the downward trend in rental prices.
“What we’re seeing right now is that there is a slackening or lightening of demand in city centers and an increase in demand in areas that are a little bit further away, where rental prices are low,” he said. “Anecdotally, what we’re hearing is in the Inland Empire, the rent prices being asked are increasing, and in a place like Pasadena, the rent prices that are being asked are decreasing.”
He pointed out that many renters may have long-term agreements, however, and continue to pay the rates agreed upon earlier.
“Basically, what’s happened in the rental market is that there has been more movement, meaning people that were renting a place may have decided to move. And when you have a vacancy and when you have an increased number of vacancies, landlords will typically begin to reduce their price in order to attract tenants to move in and stay,” according to Bray-Ali.
“And there’s also a lot of concern on the side of landlords of making sure that you rent to quality tenants, and one way that you can entice more tenants to come and look at your property is to reduce your price,” he added.
At Bryant Companies property management, owner Matthew Bryan said he’s found that that vast majority of renters continue to pay their rents, dispute a state moratorium on evictions due to the pandemic.
“There’s a few people, of course, not a lot, who legitimately lost their jobs and just cannot pay the rent right now; they can only pay a portion of the rent. So that certainly exists, but the vast majority of our tenants are paying the rent.,” he said.
“And one reason they’re doing that too, is because, you know, everybody understands that your rent is not going to be excused. You’re going to have to pay it back,” Bryant said.
But for small landlords, Bryant said issues of nonpayment due to the pandemic can have a much more significant impact.
“A lot of mom and pop type of owners, in some cases, are caught between the buzz saw of: Rent is not coming in, but they’re still obligated to make repairs and their expenses haven’t gone away. So I think it’s really tough for those kinds of owners when they are experiencing vacancies,” he said. “Obviously, it depends on how many vacancies you have in a particular property. But we’re fortunate that we don’t have any properties where there’s a lot of people who aren’t paying their rent.”
Once the pandemic comes to an end, rental prices will likely bounce back as the rest of the economy awakens from it’s virus-induced slumber.
“I think it’s going to be just a rocket ship coming back,” he said. “And if the vaccine appears to be successful… and if that solves that problem, we’re going to get back to normal really, really quick.”