South Bay, CA Multifamily Market Report
Beach Communities Submarket Overview
In Q1 2024, there has been a decrease in tenant demand in the Beach Communities submarket, and over the last decade, there has been minimal market-rate development. In recent years, the number of demolished units has exceeded the newly added ones. The only multifamily project under construction is Legado Redondo, adding 115 units, which accounts for 0.9% of the existing units.
Beach Communities Submarket Performance
The vacancy rate in the Beach Communities submarket rose to 4.4% in Q1 2024. Over the last 12 months, rental rates in the submarket increased by 1.4%, contrasting with a modest 0.1% movement in the Greater Los Angeles apartment market. The average asking rents in the submarket, at $2,630 per month, are more than 15% higher than the metro average of $2,230 per month.
During the past several quarters, sales activity in the submarket has remained more resilient than most areas in Greater Los Angeles, especially considering historical volumes. Investors are attracted to properties in this area due to their prime coastal location, affluent demographics, and appealing restaurant and retail amenities. Consequently, market pricing exceeds the Greater Los Angeles apartment average by over 20%, even though the area has a significant concentration of lower-quality properties. The 12-month sales volume stands at $127 million, with an average market price of $450,000 per unit.
Beach Communities By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 4.4%
- Rent Growth: 1.4%
- Delivered Units: 0
- Absorbed Units: 5
- Sales Volumes: $127M
South Bay Submarket Overview
Historically soft renter demand in the South Bay multifamily submarket continues during Q1 2024. In the last 12 months, the submarket has seen -85 apartment units absorbed, underperforming historical absorption levels.
South Bay Submarket Performance
The South Bay submarket continues to have one of the lower vacancy rates in the overall Los Angeles market, at 3.4%. In the last few months, rents have plateaued after rising through the first half of 2023. Over the last 12 months, average asking rents saw gains of 2.0%, outperforming the 0.1% increase seen
in the overall Los Angeles market. The South Bay Submarket stands out as one of the more budget-friendly areas for apartments in Greater Los Angeles, boasting average rents of $1,930 per month, approximately 10% to 15% below the average in the broader L.A. market. There are currently 390 units under construction, constituting 0.8% of existing apartments. This figure falls below the average for the Greater Los Angeles apartment market, which stands at 2.3%.
Q4 2023 witnessed 16 multifamily buildings sold with a combined value of $56.1 million. The 12-month sales volume is $272 million, with an average market price of $310,000 per unit.
South Bay By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 3.4%
- Rent Growth: 2.0%
- Delivered Units: 13
- Absorbed Units: -85
- Sales Volumes: $272M
Greater Inglewood Submarket Overview
In the last 12 Months, Inglewood renter demand has been quite robust.
Submarket Performance
The vacancy rate in the Greater Inglewood submarket has decreased to 5.8%, showing a decline from the peak of 6.2% observed in the middle of 2023. Despite this improvement, it still ranks among the higher vacancy rates compared to other submarkets in the metro area. Over the last 12 months, average asking rents experienced movements of 0.9%. With an average monthly rent of $1,720, this area stands out as one of the more affordable options for apartments in the Los Angeles metro area. In 2023, approximately 1,300 new units were completed, marking one of the highest numbers ever witnessed in the area’s history. Currently, there are 1,200 units under construction, making up 2.1% of the existing apartment inventory.
In 2023, the submarket demonstrated more resilient sales activity compared to most areas in Greater Los Angeles. The 12-month sales volume stands at $156 million, with an average price per unit of $280,000.
- Vacancy Rate: 5.8%
- Rent Growth: 0.9%
- Delivered Units: 1,211
- Absorbed Units: 963
- Sales Volumes: $156M
