Multifamily Sales Activity in Los Angeles Builds Ahead of Rising New Deliveries

Property fundamentals in the Los Angeles multifamily market were relatively stable during the second quarter, a healthy sign considering the uncertainty that the market has faced in recent periods. Persistent outmigration, natural disasters, and modest job losses at the start of the year weighed on sentiment, but now there are signs of stabilization occurring within the market. Demand for apartments has remained steady, even as the market contends with some of the highest levels of multifamily construction in the past decade, particularly in Downtown Los Angeles. Net absorption totaled more than 3,500 units during the first half, closely tracking levels from last year and aligning with the region’s trailing 10-year average. Consistent renter demand has kept vacancy within a narrow range during the past year. Rents inched higher in recent months after stalling at the beginning of the year.

Sales activity in the Los Angeles multifamily market maintained a steady pace during the first half of the year, bouncing off of lows recorded in 2024. Still, activity levels are below trend; total sales to this point in the year are lagging long-term averages for the period by approximately 30%. Transaction activity in Downtown Los Angeles has gained momentum in 2025, with transaction counts more than doubling first-half 2024 levels. Downtown has led the region in sales, accounting for nearly half of the total number of transactions that have closed year to date. Across Greater Los Angeles, the median sale price has reached $314,000 per unit, although pricing in West Los Angeles and Long Beach is considerably higher than the regional median.

Looking ahead

Despite some stresses in the local economy, multifamily property performance in Greater Los Angeles is expected to be mostly steady throughout the remainder of this year. Completions should gain momentum and this year is expected to be the highest annual total of deliveries in more than a decade. Still, the county is generally facing a housing shortage, and Downtown Los Angeles is the only submarket cluster with any significant apartment vacancy. Longer term, the development pipeline is expected to thin, as land sales for multifamily parcels have slowed considerably to this point in 2025. While vacancy conditions are expected to remain mostly flat through the remainder of this year, the relative softness in the local economy will make it tough for operators to implement any significant rent increases, and overall market averages will likely end this year similar to current levels.

Activity in the Los Angeles multifamily investment market may trend higher through the end of the year, as total sales in 2025 should outpace the limited levels recorded in both 2023 and 2024. Despite the rise in deliveries expected to come online by the end of the year, total completions will still be modest when compared to the total inventory in the region. As a result, elevated supply is unlikely to significantly impact investor sentiment, with competitive dynamics holding steady across most submarkets. Rising rents and a low vacancy rate are expected to create additional opportunities in the market. There are a considerable number of properties currently listed for sale in the region, particularly in Downtown Los Angeles, reflecting increased activity and opportunity for both investors and owners.

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