Los Angeles Q3 Multifamily Market Report: Rents Spike and Vacancies Tighten as Economic Growth Accelerates

LA Market Fundamentals
  • The multifamily market in Los Angeles turned a corner during the third quarter. After nearly one year of mixed property performance, vacancies tightened throughout the region and rents rose at a rapid pace. Further improvement is likely as the local labor market continues to add workers.
  • Vacancy in Los Angeles fell 40 basis points during the third quarter, reaching 4.1 percent. The rate had held steady in the first half of the year. Year over year, vacancy is down 10 basis points.
  • Following a few quarters of mixed performance, rents posted strong gains in the third quarter. Asking rents rose to $2,106 per month, up 4.6 percent from one year earlier. Continued rent increases are forecast for the next few quarters.
  • Sales of multifamily properties slowed somewhat during the third quarter. The median price in sales thus far in 2021 is $285,200 per unit, up slightly from 2020 levels. Cap rates have compressed to an average of 3.9 percent.
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