Home rentals have a lot of highs and lows

Inflation is going down and the stock market is going up. What a wonderful way to end the year.

But inflation itself is not going down, only the rate of increase has slowed. After peaking at 9% in June 2022, inflation fell to 3.9% at the end of September. But, somehow, consumers are still getting the short end of the stick.

Some costs remain inexplicably high, like that nice restaurant meal that used to cost $15 and now runs more than $25—and that $3,700 price being charged for the average rent in the Conejo Valley.

Double ouch.

Speaking of the cost of rent, the Grinch has made it hard this year for people who live in homes they don’t own. But according to a new report by Rent.com, the outlook is easing somewhat.

Following 37 consecutive months of nationwide price increases in which asking rents grew by more than 20%, prices began shrinking in May of this year.

Still, the report says, “On a longer-term basis, rents remain elevated. Since November 2019, months before the pandemic, prices have risen by more than 22 percent, adding $355 to monthly rent bills.”

Rents in the Los Angeles metro area increased by more than 5% over last year, but the recent month-over-month change in the L.A. market is down about 2%. A small, but appreciable victory.

According to the year-end USC Casden Real Estate Economics Forecast, rents in the Camarillo-Moorpark-Newbury Park submarket are expected to climb more than 4% through 2025. Not too bad, considering the hikes reached 14% just two years ago.

The Simi Valley-Thousand Oaks submarket is experiencing wider swings. Rents there climbed more than 16% in the wake of the pandemic, but the forecasted increases are predicted to be under 3%, the USC Casden report says. So, we see rents still going up, just not as fast as before.

This holiday season, let us count our blessings.

The bigger question remains, who can really afford to live here?

The L.A. metro area median rent stands at $3,600, and any financial advisor will tell you it takes an income of about $125,000 a year to comfortably afford that number.

According to the USC report, Ventura County’s median renter income in 2021 was $67,500. And with rents in the area still on the rise it’s not likely that salaries will keep pace.

Something has to give.

Either renters suck it up, scramble for as much cash as they can muster and attempt to buy an equally inflated home or condo—or move out of the area.

But when the workforce gets pushed out and only retirees and long-term homeowners can afford to live here, it’s not a good thing.