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Category: Apartments, Multifamily Tags: -

Multifamily Market Overview

Los Angeles, CA

Since the beginning of 2021, the Los Angeles market has improved immensely. Apartment demand remains strong, indicated by downward trending vacancies. Since peaking at the end of 2021, the vacancy rate sits at 3.6 percent, the lowest level in decades. Asking rents peaked in August 2022 and have declined, following the trend of most other markets nationally. High construction costs make it difficult to develop new communities in most areas of Los Angeles. Despite this the metro saw 9,100 new apartment units added during the past 12 months with 7,200 units in high-end, Class A communities.



  • Sales volume in the past 12 months reached $13.3B.
  • Koreatown is a hotspot for apartment developers, with 3,300 units underway in the pipeline.
  • Los Angeles has one of the highest percentages of renters of any U.S. metro, with roughly half of all households renting their homes.
  • Rent growth on a year-over-year basis continues, at 3.4%.
  • Average market pricing, at $420,000 per unit, is well above the national average of $260,000 per unit.


Rents | Vacancy | Construction

Market vacancy is anticipated to remain near record lows for the near to mid-term, as tenant demand is forecast to be relatively strong. Average asking rents in L.A. presently stand at $2,180 per month. Furthermore, rent regulations in the L.A. apartment market and their potential impact on tenants and investors are important to consider. Assembly Bill 1482, which took effect at the start of 2020, limits yearly rent increases across all of California to five percent, plus the cost of inflation for the next 10 years and strengthens renter protections against eviction. Downtown Los Angeles, Burbank, and Koreatown have the most apartment units currently under construction relative to the area’s existing inventory. From a location standpoint, more affordable apartment locations, including the Antelope Valley and many pockets in the San Fernando Valley and San Gabriel Valley, generally outperformed concerning rent growth.



Los Angeles by the numbers in the past 12 months

  • Proposed Units: 27,823
  • Units Delivered: 9,406
  • Average vacancy rate: 3.6%
  • Average asking rent: $2,180/month
  • Average price per unit: $420,000
  • Sales Volume: $13.3B



Multifamily transaction activity during the last 12 months in Los Angeles, $12.9 billion, was strong, above historical averages, and demonstrates ample investor demand for the property type. Several of the largest recent transactions in L.A. have involved public/private partnerships purchasing newer market-rate apartments to convert to communities restricted to middle-income renters, those making 60 to 120 percent of median area income. Average market cap rates, at 3.9 percent, are well below the U.S. average of 4.9 percent. Key drivers of the market’s elevated pricing at $420,000 per unit, include the metro’s position as the second-largest metro in the nation, diverse economic drivers, and a land-constrained coastal location.


United to House L.A. (Measure ULA) will take effect on April 1, 2023. The measure aims to fund affordable housing programs for tenants at risk of homelessness and slap a tax on high-priced real estate sales (4% to 5.5% tax on property transfers over $5M-$10M).**                                                                                                                                                                                                                                            

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