Southern California 4Q23 Multifamily Market Insights Report: Investment activity limited in 2023, cap rates rise


  • Apartment fundamentals softened a bit in Southern California in 2023, with vacancy rates inching higher and rents posting modest declines. The pace of construction rose in 2023, but Southern California is more supply-constrained than most other major multifamily regions.
  • Vacancy in the region rose 50 basis points in 2023, with the rate ending the year at 4%. During the fourth quarter, vacancy inched up 10 basis points.
  • Rents generally trended lower in Southern California in 2023, although Orange County posted some modest gains. The average rent in the region dropped 1.5% in the past year, with the fourth quarter proving to be the weakest period for area rents.
  • The investment market was less active in 2023 than in recent years, although more properties sold in the final three months of the year than during any other quarter. Cap rates rose about 100 basis points on average.

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