First-Half Multifamily Sales Activity in Southern California Rises with Mixed Pricing Trends

Multifamily property fundamentals in Southern California presented a mixed picture during the second quarter of 2025. Developers have remained active in recent years, and during the first half, approximately 8,000 new units came online, a 0.5% increase to regional inventory levels. Nearly half of these units were delivered across Greater Los Angeles, while Orange County had the fewest units coming online. Vacancy has proven to be consistently steady across the region as a whole, averaging 4.5%. Most of the primary markets in the region are recording annual vacancy increases ranging from 10 basis points to 40 basis points. Rents have largely remained in stuck in neutral across the region, although Orange County and the Inland Empire have both recorded annual increases topping 2%. The pace of new supply growth will likely slow beginning in 2026, although a cooling regional employment market could result in a slowing pace of new renter demand for units.

Multifamily investment activity in Southern California has gained momentum through the first half of 2025. Investment volume has surged, with transaction counts to this point in the year exceeding levels recorded in the first half of 2024 by 63%, reflecting heightened investor engagement across the region. While more properties are changing hands, pricing has inched lower. The median sale price year to date is $314,000 per unit, a 4% decline from last year. A major contributor to this trend is the drop in values for Class C properties. These lower-tier assets, which have accounted for roughly half of all transactions so far this year, are trading at a median price of $240,300 per unit, 22% below 2024 levels. Demand remains elevated for higher quality assets, and Class A pricing has trended higher in recent periods. The median price for Class A properties to this point in 2025 has reached $445,200 per unit, up 12% from last year. Cap rates across the region have held steady at approximately 5%, unchanged since 2023.

Download the full report to explore trends in the following Southern California markets:

• Los Angeles
   
• Orange County
   
• San Diego
   
• Inland Empire