Rent Rates Decreasing - Los Angeles

[David Mayman]

Hi All, 

I was driving around my neighborhood and I noticed a lot of for rent signs.  I have a tenant who's lease is coming up in a triplex I own in the area, and they requested a $200 reduction in rent of of their current rent of $2,200.  This is for a completely upgraded (a few years ago - granite counters, open concept, chef's kitchen, great entertaining space, new bathroom) 1 bed 1 bath in an excellent neighborhood.  I looked for comps online and I see that my pricing at $2,200 is about right for the area and quality of my unit.  Please note that by reducing the rent, I will be locked into that rate for the next year, but also likely will not be able to increase the rent the year after by more than 3% as the unit is rent controlled.  On the plus side, the tenant is a business school student, and probably will not stay in the unit long term so rents will reset when this tenant moves out.  

Additionally, a friend of mine who is renting just told me that she was moving because rental rates decreased and she can now get a 3 bedroom place for about 10-15% less than it would have been pre-covid (from about $4,200 to $3,600).  She was looking to buy a place, but there was no inventory and prices were still sky high and going higher!

I was curious if other people invested in the area or in other urban areas were noticing a drop in rental rates. Is this a blip, or a long term trend?  Is this actually an overall trend - in urban areas, or is this just what is happening in my small neighborhood in West Los Angeles?