The South Bay Rental Market in 2026: Rents, Vacancy, and What We're Seeing

Published February 10, 2026

A ground level look at South Bay rental data in 2026, from median rents by city to vacancy rates, aerospace hiring trends, and tenant behavior.

South Bay Rental Market 2026: What the Numbers Actually Look Like

I have been managing properties across the South Bay for over 15 years now, and I can tell you that the rental market in 2026 looks fundamentally different than it did even three years ago. I would not call it better or worse. Different. The dynamics have shifted and the tenant pool has changed. Pricing varies dramatically depending on which side of Sepulveda you are on. Here is what we are actually seeing on the ground managing 200+ units across this region.

Rents by City: The Real Numbers

Let me break down what we are seeing for average monthly rents on a two bedroom unit across the South Bay as of early 2026.

Manhattan Beach leads at $5,060 per month. That number still surprises people, but when you factor in the walkability to the Strand, the school district ratings, and the general scarcity of rental inventory in that market, it tracks. We have maybe 15 to 20 rentals come available per month across the entire city.

Hermosa Beach comes in at $4,200. The gap between Manhattan and Hermosa has narrowed over the past two years. Younger professionals who got priced out of Manhattan are landing in Hermosa and driving competition up.

Redondo Beach sits at $3,580. There is a real split in Redondo between the North Redondo units closer to the Riviera Village and the South Redondo properties near the pier. North Redondo can push $3,800 to $4,000 for updated two bedrooms, while South Redondo stays closer to $3,200.

El Segundo averages $3,010. This is the market I know best since it is our home base. El Segundo has been one of the most interesting rental stories in the South Bay over the past five years, and I will get into why shortly.

Torrance comes in at $2,450. Old Torrance near downtown commands a premium, but the city is so spread out that averages can be misleading. A nice two bedroom near the Del Amo area runs $2,600 to $2,800.

Hawthorne is at $2,350 but climbing fast. More on that in a moment.

Inglewood averages $2,150 and that number has been rising steadily since 2020.

Lawndale sits at $2,050. Solid value play for tenants and investors.

Gardena rounds out the list at $1,950. Still the most affordable South Bay city, but the days of finding a two bedroom under $1,700 are essentially over.

Vacancy Rates Tell the Real Story

The coastal cities from Manhattan Beach down through El Segundo are running vacancy rates under 3 percent. In some months for Manhattan Beach, we see vacancy dip below 2 percent. That is a landlord's market in terms of pricing power, though California regulations limit how aggressively you can raise rents on existing tenants.

The inland cities from Hawthorne through Gardena are running vacancy between 4 and 5 percent. That is still healthy by historical standards, but it means tenants have a bit more negotiating room. If your inland property is sitting vacant for more than 21 days, that is a signal that your pricing or your unit condition needs attention.

Hawthorne: The Growth Story

If I had to pick one city in the South Bay that is most interesting from an investment perspective right now, it is Hawthorne. Rent growth is running at 4 percent plus year over year, which is the highest in the region. The obvious driver is aerospace. SpaceX alone has over 10,000 employees in Hawthorne, and they are still hiring aggressively for the Starship program. SpaceX is only one piece of it. The entire aerospace corridor from El Segundo down through Hawthorne has created a concentration of high income, stable employment tenants.

The Magnitude LAX redevelopment on the old Hawthorne Mall site is a 20 acre project that will bring roughly 600 new residential units along with retail and commercial space. That project has an August 2026 deadline for initial phases, and the construction activity alone is already changing the feel of the neighborhood.

The Aerospace Factor

Speaking of aerospace, you cannot understand the South Bay rental market without understanding the defense and space industry concentration here. SpaceX, Northrop Grumman, Raytheon, ABL Space Systems, and dozens of smaller contractors collectively employ somewhere between 25,000 and 30,000 workers in the South Bay. These are tenants with credit scores averaging 720 or higher, stable W2 income, and a tendency to stay 2 to 3 years in a unit.

The SoFi and Intuit Dome Effect

Inglewood deserves its own discussion because the stadium effect is real and measurable. Since SoFi Stadium opened, followed by the Intuit Dome, the rental dynamics in Inglewood have shifted dramatically. Higher income tenants are moving in, event night traffic has become a factor that tenants either love or hate, and property values in the half mile to mile and a half radius around the venues have appreciated 30 to 40 percent since 2019.

What We Are Seeing on the Ground

Beyond the numbers, this is what is happening in our day to day leasing operations across 200+ units.

Credit scores on applications are averaging over 700 across our portfolio. Five years ago that average was closer to 660. The tenant pool has genuinely improved in quality, which is great for landlords but also means tenants have higher expectations.

Application volume is up roughly 10 percent compared to this time last year. We are seeing more applicants per listing, which gives us better selection but also requires more efficient screening processes.

Renewal rates are sitting at 72 percent across our portfolio. That is a healthy number. When renewals drop below 65 percent, it usually signals a pricing or maintenance problem. Our 72 percent tells me we are priced right and keeping units in good condition.

The biggest shift I have noticed is that tenants are becoming significantly more selective about unit condition. Five years ago, a tenant would overlook dated countertops or older appliances if the price was right. Today, even in the $2,000 to $2,500 range, tenants expect updated kitchens, decent flooring, and modern fixtures. The properties that sit vacant the longest are almost always the ones where the owner has deferred cosmetic updates.

This is why we keep pushing our owners to invest in targeted upgrades between tenants. A $3,500 spend on new countertops and cabinet hardware can mean the difference between 14 days on market and 45 days on market. Vacancy on a unit like that costs about $100 per day in lost rent.

The South Bay rental market in 2026 rewards owners who stay informed, price accurately, and maintain their properties proactively. The fundamentals are strong and the tenant pool is excellent. Aerospace and entertainment continue to drive demand. But the days of putting a basic unit on the market and watching applications pour in are fading. Tenants have choices, and the owners who respect that reality are the ones seeing the best returns.

Topics: south bay, rental market, 2026, vacancy rates, rent trends, market analysis

See what your property could rent for

Back to the Schofield Properties blog

Schofield Properties is a family run property management company at 323 Richmond St, El Segundo, CA 90245. We have managed the South Bay since 1972 and personally oversee about 186 doors today. Book a call to talk about your property.