Despite most market trend analysis in the state (especially in SoCal), this area in Los Angeles County is experiencing an unexpected and sharp decline in rental prices, arguably the most dramatic in the region. According to recent studies, Santa Monica has seen an annual drop of 8.1%, as reported by the Santa Monica Daily Press.
The median rent now stands at $2,328 per month, down from about $2,527 a year ago, a decrease of nearly $200. This sharp decline marks a major shift from early 2025, when rents briefly surged following the January Palisades Fire. The wildfire destroyed thousands of homes in nearby and displaced many residents, temporarily increasing demand for rentals and pushing prices,
The spike was short-lived, as by mid-2025, rents began to fall and the downward trend has continued into 2026. The decrease is visible across different unit sizes. One-bedroom apartments dropped from a median of $2,392 to $2,203, while two-bedroom units declined from $2,867 to $2,641 over the same period.
Why are rents falling in Santa Monica?
Several factors are driving the decline in Santa Monica’s rental market. One of the main reasons is the increase in new multifamily housing, which has added more options for renters and reduced competition. Additionally, the city’s strict rent control regulations limit how much landlords can raise prices, helping to stabilize or even lower rents over time.
Another factor is population outflow. As some residents move to more affordable areas, housing demand has decreased. This has hit smaller units, such as studios and one-bedroom apartments, the most, since they face the strongest competition from new apartment buildings coming onto the market.
Despite the recent decline, Santa Monica remains one of the most expensive rental markets in SoCal. Its median rent of $2,328 is still about 7% higher than the Los Angeles metro average of $2,176.
