Location: Los Angeles-Long Beach-Glendale, CA | Metro: Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,790 |
| 1 Bedroom | $3,110 |
| 2 Bedrooms | $3,840 |
| 3 Bedrooms | $4,870 |
| 4 Bedrooms | $5,450 |
| 5 Bedrooms | $6,322 |
| 6 Bedrooms | $7,081 |
| 7 Bedrooms | $7,647 |
| 8 Bedrooms | $8,029 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $3,110 | $669,361 | 0.46% | F |
| 2BR | $3,840 | $1,442,770 | 0.27% | F |
| 3BR | $4,870 | $2,340,129 | 0.21% | F |
| 4BR | $5,450 | $2,975,815 | 0.18% | F |
| 5BR | $6,322 | $3,583,202 | 0.18% | F |
U.S. Census Bureau data (2024)
The ZIP code 90405, located in Santa Monica, CA, presents a dynamic rental market with strong indications of demand. The Fair Market Rent (FMR) for the area stands at $2,960 for the fiscal year 2024, while the Zillow Observed Rent Index (ZORI) indicates a slightly higher market rent of $3,304. This suggests that the rental market is robust and potentially exceeds government estimates, pointing towards a healthy demand environment.
A key indicator of market health is the price-cut share, which is only 0.2% in this case. This figure is exceptionally low, indicating that landlords rarely need to reduce rents to attract tenants. It implies a tight rental market where properties are likely to be occupied quickly, reducing the need for concessions.
The median home value of $1,922,104 further underscores the premium nature of the real estate in Santa Monica. Such high values can deter potential homeowners, especially first-time buyers, leading to an increased reliance on rentals. With a 68.6% renter share, it's evident that the majority of residents prefer or require renting over buying, which creates sustained long-term housing pressure. This high percentage of renters signals a consistent demand for rental properties, making it a favorable market for landlords and small-portfolio investors who can capitalize on the steady stream of tenants.
The lack of available data on days on market (DOM) could imply several scenarios: either the market moves so swiftly that properties find tenants almost immediately, or there might be a shortage of listings due to the scarcity of available rental units. Given the low price-cut share and the high median home value, the former scenario is more likely, suggesting that supply is tightly aligned with or possibly underperforming relative to demand.
In summary, ZIP 90405 represents a vibrant rental market with strong demand characteristics. The low price-cut share and high renter share indicate that the area is experiencing sustained pressure for rental properties, making it a compelling investment opportunity for those looking to enter or expand their presence in the Santa Monica real estate sector.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.