By Jorge Casuso

January 31, 2023 -- Santa Monica rents dropped for the fifth straight month in January but continue to outpace the growth rate of other LA Metro cities, according to a report released by Apartment List on Thursday.

The overall median rent in the city fell -0.8 percent to $2,182 per month and has now increased by 6.3 percent year-over-year over the past 12 months.

That's the fastest year-over-year rent growth in the LA Metro region, which includes 23 cities analyzed in the monthly report, according to data compiled from listings on the popular website.

Santa Monica's rent growth in January also outpaced California's 2.3 percent growth as well as the nation's 3.3 percent average growth, as the nationwide market continued to cool down.

"January’s decline was still sharper than the usual seasonal trend, signaling the continuation of a broader cooldown in market conditions," the report said.

The cooldown is "mirrored by continued easing on the supply side of the market," which saw the nationwide vacancy index rise to 6.1 percent, "surpassing 6 percent for the first time since spring of 2021."

Year-over-year rent growth is at its lowest level since April 2021 and is now "pacing just slightly ahead of the average rate from 2018 to 2019 (2.8 percent)," according to the report.

The decelerating rent growth is likely to decline further in the months ahead, Apartment List researchers predict.

While the overall median rent in Santa Monica is 5.6 percent above that of the Metro Los Angeles region, Marina del Rey remains by far the most expensive area, with a median average rent of $4,707, while Long Beach remains the cheapest with a median rent of $1,662.

In January, median rents in Santa Monica were $2,061 for a one-bedroom and $2,568 for a two-bedroom. That compares with $1,642 and $2,268 for one-bedroom and two-bedrooms in Los Angeles.

Except for Marina del Rey, the region's highest rents in January were in Orange County cities, with Newport Beach, Irvine, Lake Forest, Laguna Niguel and Mission Viejo topping Santa Monica's rents.

Nationwide, year-over-year rent growth has been decelerating consistently for over a year, after peaking at "an astronomical" rate of 18 percent in December 2021.

In January, rents fell in 67 of thee nation's 100 largest cities, with prices dropping sharply in Newark, New Jersey; Boise, Idaho; San Francisco and Seattle.

"With recent layoffs signaling a downturn in tech, there is reason to believe that these markets may remain soft throughout the course of this year," researchers wrote.

The growth in both rents and vacancies are being driven by fewer people "striking out on their own" and a boom in multi-family construction that has reached the highest level since 1970, according to the report.

"After a prolonged period of skyrocketing rent growth, and with non-housing related costs also getting more expensive as a result of broad-based inflation, it seems that some Americans are moving back in with family or roommates," researchers wrote.

"At the same time, new apartment construction is picking up steam again after facing pandemic-related delays in recent years."

Apartment List Rent Report data is drawn monthly from the millions of listings on the site, according to the website.

The report calculates one-bedroom and two-bedroom rents and "aims to identify transacted rent prices, as opposed to the listed rent prices." To view the full report click here.