- Fueled by a resurgent tech sector and AI investments, Silicon Valley is now the sixth-hottest rental market in the nation.
- California’s second-hottest rental market, Orange County, holds the #8 spot with an RCI score of 78.8.
- Eastern LA saw the largest YoY jump in rental competitiveness, climbing from 25th to 9th place.
Silicon Valley has surged to become the sixth most competitive rental market in the U.S., driven by a resurgence in the tech sector and significant investments in artificial intelligence, according to RentCafe.
Some Context
At the start of the moving season, the national Rental Competitiveness Index (RCI) score was 73.4, indicating a moderately competitive market. By comparison, the national apartment supply has only inched up 0.61% since January. That’s why 29% of the 137 markets analyzed by RentCafe are reporting longer vacancy periods and more lease renewals.
Silicon Supremacy
With an RCI score of 80.8, Silicon Valley’s appeal is reflected in high lease renewals and an occupancy rate. Venture capital investments in emerging technologies like AI, cybersecurity, and fintech are also attracting plenty of highly skilled professionals, making the rental market fiercely competitive.
The influx of new renters and the limited availability of new apartments in the Valley have significantly driven up competition. With an occupancy rate of 95.1% and no new units recently introduced, options are scarce. Unsurprisingly, vacant apartments remain on the market for an average of 40 days as each available unit attracts 12 prospective renters.
California Living
Other California hotspots for apartment hunters include Sacramento, Central Valley, and Central Coast, Ventura County in North LA, Eastern LA, Orange County, and San Diego. High occupancy and strong lease renewal rates are also common trends in these markets.
Orange County is CA’s second-hottest rental market and in eighth place nationwide with an RCI score of 78.8 and an occupancy rate close to 96%. Up to 63.4% of current OC renters chose to renew their leases at the start of the moving season, up 4% from the previous year.
Meanwhile, Eastern LA has seen the largest YoY jump in rental competitiveness, soaring from 25th place to the ninth spot in the rankings. This dramatic rise is thanks to high lease renewals, from 42.1% to 52.7%, leaving limited options available for 2024 apartment hunters.
