June 27, 2023

Los Angeles 1Q23 Multifamily Market Insights Report: Sales activity picks up to start 2023

Highlights:

The Los Angeles multifamily market softened in the first few months of 2023, as renter demand continued to ease. The vacancy rate rose in recent months while asking rents declined. Following limited supply growth in recent years, developers brought new projects online during the first quarter and will ramp up completions in the remainder of the year.
The local vacancy rate pushed higher during the first quarter, rising 30 basis points to 3.8%. Year over year, the rate improved by 10 basis points. The long-term average vacancy rate in Los Angeles County is 3.9%.
After surging in recent years, rents fell in the last three months. Asking rents dropped 2.3% during the first quarter to $2,400 per month. The market has recorded strong gains during the past year, with asking rents rising 7.3% in that time.
Multifamily sales activity gained momentum in the early months of the year but still trailed levels recorded in the first few months of 2022. The median sales price year to date is $303,500 per unit, down 7% from last year’s figure. Cap rates averaged around 4.6% in the first quarter.