Greater Los Angeles Q4 Multifamily Market Insights: Vacancy Tightens as Labor Market Rebounds

Highlights:

  • Multifamily operating conditions improved in Los Angeles during the fourth quarter. Rents continued to climb in recent months and vacancy tightened. Continued recovery in the local employment market should support renter demand in the coming quarters.
  • Vacancy in Los Angeles dipped 10 basis points during the fourth quarter, building upon a 40 basis point compression during the prior quarter. The rate declined 50 basis points during 2021, reaching 4 percent.
  • Asking rents pushed higher during the final quarter, following a significant spike in the third quarter. Year over year, rents advanced 8.2 percent, ending 2021 at $2,136 per month.
  • Multifamily sales velocity accelerated in the last few months of the year. The median price in 2021 reached approximately $290,400 per unit, up 5 percent from the median price in 2020. Cap rates averaged 3.7 percent in the fourth quarter.

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