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Why Assumptions for Costa Mesa Rental Prices May Go Awry

Local homeowners who aren’t also Costa Mesa landlords probably don’t concern themselves much about how Costa Mesa rental prices fare from month to month. Although almost everyone has been a renter at some point in their lives, when you buy a home you call your own, your real estate attention tends to focus on the details you actively encounter.

True, it’s hard to totally ignore rental market activity completely—especially if headlines roar eye-catching phrases like “first time ever” or “highest level in history.” Last week, the Wall Street Journal blared one of those, including both “First Time in Two Years” and “Climbing to Records.” In fact, area homeowners who read on would have done so because of the surprise that headline constituted. It was a ‘Man Bites Dog’ reversal, reading, in full:

Rents Drop for First Time in Two Years After Climbing to Records

That wasn’t all. The caption beneath the photo of an apartment building’s “For Rent” sign read, “Many economists say the rental market is poised to see more declines in the coming months.”

What th-?

If there’s one thing you’d think is a two-plus-two-equals-four lead pipe cinch, it’s that rising inflation and explosive single home purchase prices must logically result in higher rent prices. That it ain’t so needs some explanation, which the Journal supplied:

The explosive 23% increase in U.S. rent prices since August 2020 may have been fueled by pandemic lockdowns which are now fully in the rearview mirror. Such dramatic increases have to face reality: consumers can no longer afford to keep pace with price hikes. Although home purchase prices did price some would-be buyers out of the market—the resulting increase in demand may have been over-reported. Official consumer price indexes that confirm a continued rise in rent prices are misleading because most apartment tenants have signed one- or two-year leases. “What tenants actually pay” is lower than official “housing cost” figures show. Last Friday, another symptom was reported by Marin County leasing powerhouse Foundation Homes: “Rents is Q3 held steady,” but “quite a large inventory of rental homes was left sitting on the market for 50% longer than the same time last year.”

Those factors can also be added to what could be the most important one—the ancient adage “what goes up, must come down” doesn’t always prove true when it comes to real estate prices, but when you consider how landlords rightly abhor vacancies, it’s not really surprising if rental rates have finally bumped up against renter income limitations.

It’s an era of moving trend lines—and that makes hiring the most informed Costa Mesa Realtor® essential for finding and securing the real estate opportunities that are still out there (they’re there). Call!

We are built on a philosophy of Heritage & Hustle. The L3 is a full service real estate agency with a regional office located in the heart of #CostaMesa, offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976.  It’s L3 mission is to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. The L3 was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, The L3 has grown to a full staff of 25 serving over 300 clients a year. The L3 is not limited to serving just its clients; it is also committed to serving the community. Not only has The L3 donated hundreds of hours to many area charities, they have also received the prestige of being named one of the #toprealestatecompaniesinCostaMesa  If you’re interested in #buyingorsellinginOrangeCounty, turn to the experts. Turn to The L3 and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact The L3 today at 714-444-4663 or email us at info@thel3.com

  

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