Q4 Los Angeles, CA Multifamily Market Report
Market Overview
Los Angeles (LA) has a vast economy, playing a significant role in national entertainment, tourism, international trade, fashion, and aerospace industries. The city is rich in creative workers and entrepreneurship, fostering business formation and self-employment. Notable talent generators include top-tier universities like USC, UCLA, and Cal Tech, supporting a growing tech ecosystem. Over the past five years, average asking rents have increased by 10.9%, compared to the national increase of 19.6%. LA witnesses more modest development activity than most markets due to high development costs, anti-density politics, and demanding permitting processes.
Market Performance
LA Submarkets Rent Growth
- Hollywood: -0.9%
- Koreatown: -0/7%
- East Hollywood: 0.4%
- Westlake: 0.7%
In the last 12 months, rent growth has remained stagnant in the Greater LA multifamily market, in contrast to the national average of 0.7%. Vacancy in the market rose from a two-decade low of 3.9% in Q1 2022 to 4.9% in Q4 2023. Recent net absorption of 5,658 units in the past 12 months is below historical trends, with the annual average absorption over the past decade being 8,000 units. Downtown LA has experienced notable erosion in market conditions, with vacancy around 10%, up from a recent low of 6% in Q1 2022 and 7.3% four quarters ago. Los Angeles saw the completion of 11,927 new units in the past 12 months, representing inventory growth of around 1.2%. The current construction pipeline comprises 23,097 units, representing 2.3% of existing inventory. Q3 multifamily sales activity in the LA multifamily market amounted to $876 million, following $864 million in Q2 2023.
Los Angeles By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 4.9%
- Deliveries: 11,927 Units
- Absorption: 5,658 Units
- Sales Volume:$4.8B
- Cap Rate: 4.6%
To read a previous Los Angeles Multifamily Market Report, click here.
