Central San Fernando Valley, CA Multifamily Market Report Q3 2025

The San Fernando Valley multifamily market is showing balanced but mixed performance in late 2025, with modest rent softness and varying vacancy levels across submarkets. Vacancy has inched higher in areas with new supply, most notably Sherman Oaks at 6.3% and Van Nuys at 4.7%. Rent growth has been flat to slightly negative in most areas, except Encino, which posted a solid 1.8% annual gain. Development is concentrated in Van Nuys and Sherman Oaks, while construction remains limited elsewhere, helping maintain overall stability. Investment activity continues at a slower pace, with pricing down roughly 15%–20% from 2022 peaks due to higher financing costs. Overall, the market remains fundamentally sound, supported by affordability and steady demand.

Key Findings

Vacancy rose to 4.8%, up from 4.1% a year ago, as absorption slowed sharply with only 73 units leased over the past 12 months. This uptick signals softer renter demand and lingering lease-up challenges from recent deliveries.
Market rents increased marginally by 0.2% year-over-year to an average of $2,126 per unit, indicating flat growth after several years of stronger gains. Affordability concerns and limited renter momentum are keeping rent growth subdued.
Sales volume reached $818 million over the past year, with pricing rising slightly to $327,000 per unit and cap rates up to 5.0%. Investor activity remains steady but cautious as higher financing costs pressure deal flow.

Demographics

Source: CoStar Group, Inc.

Unemployment Rate: 6.1%
Current Population: 1,815,801
Households: 641,242
Median Household Income: $90,176

Sales

Sales volume and pricing in Q3 2025 held firm, signaling steady investor confidence despite broader capital market headwinds. The average sale price per unit increased to $327,000, up 0.5% year-over-year, while total transaction volume reached $818 million across 452 properties. The market cap rate rose slightly to 5.0%, continuing a gradual upward trajectory seen across Southern California as yields normalize. Private investors continue to dominate market activity, while institutional and REIT buyers maintain a smaller but steady presence. Overall, the market remains active, with strong rent fundamentals and limited new supply sustaining its appeal as a stable, long-term investment environment.

Sales Volume & Price Per Unit

Source: CoStar Group, Inc.

Construction

Construction activity experienced a modest uptick, with 1,802 units currently underway, representing a 9.1% increase from the prior reporting period. Over the past year, 855 new units were delivered while 1,006 units started construction, signaling measured yet ongoing development momentum. The market’s 28.2% occupancy at delivery suggests steady absorption of newly completed projects. With no demolitions recorded in the past 12 months, the existing housing stock remains largely intact, and overall construction trends indicate a balanced supply pipeline that aims to align with long-term population and income stability in the region.