Rent Cuts Persist in Santa Maria Despite Low Supply and Tight Occupancy

The Santa Maria-Santa Barbara, CA apartment market, like most of California, has a chronically under supplied housing market. Still, operators here are cutting rents. Santa Maria is located along the Pacific coast, with more than 150 miles of coastline. The area is a popular tourist destination and one of the nation's largest wine-producing regions. The largest employers are the University of California, Santa Barbara and Vandenberg Space Force Base. Government, Education/Health Services and Leisure/Hospitality are the largest employment sectors, accounting for more than half of all jobs. However, Santa Maria’s population declined 0.8% from 2000 to 2024 to stand at 445,000 people, according to the latest estimates from the U.S. Census Bureau. Santa Maria, with roughly 29,000 existing units, added 174 units during the year-ending 1st quarter 2025, according to data from RealPage Market Analytics. This mild supply increased inventory a mere 0.6%, mirroring the 10-year average growth pace. Meanwhile, occupancy registered at a tight 96.5% in 1st quarter 2025. And yet operators resorted to rent cuts recently. During the year-ending 1st quarter 2025, effective asking rents fell 1.9%, following a year-over-year decline of 0.7% in 2024’s 4th quarter. Rent cuts in this market are rare. Since RealPage began tracking the market in 2012, the only other times rents declined on a year-over-year basis was in the last two quarters of 2020. For comparison, during the five years leading up to the pandemic (2015-2019), Santa Maria averaged effective asking rent growth of 5.2% and occupancy of 97.4%. Average effective asking prices of $2,706 were below southern California’s major coastal markets: Anaheim ($2,843), San Diego ($2,795) and Los Angeles ($2,789).