Q3 2022 Multifamily Report: Los Angeles, CA
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The Greater Los Angeles multifamily market experienced three consecutive quarters of rent growth between Q1 and Q3 2022. Occupancies remained at an all-time high of nearly 97%, and rents peaked at nearly 10% above pre-pandemic highs.
The monthly rent for a one-bedroom apartment in Los Angeles currently sits at about $2,200, close to its Q2 2022 high and driven by excessive demand for coastal California living.
These eye-opening statistics come about despite slowing capital markets, the Fed’s fight against inflation, and migration towards the more affordable housing markets in the Midwest and Sunbelt regions.
What Are Multifamily Rents Like in Los Angeles, CA?
The Los Angeles multifamily market has seen tremendous rent growth since its occupancy levels hit all-time lows at the start of the pandemic in March 2020.
- The Westside submarket of Los Angeles posted some of the highest multifamily rent in Los Angeles County at the end of Q3 2022 at nearly $3,000 per month.
- The Southbay submarket of Los Angeles posted more affordable rent in the county at the end of Q3 2022 at about $1,800 per month, a 4.7% year-to-date increase.
- The East submarket of Los Angeles posted some of the most affordable monthly rent in the area at about $1,700 per month, a 5.3% year-to-date increase.
- The Glendale/Burbank/Pasadena submarket of Los Angeles posted the second-highest monthly rent numbers for the county at the end of Q3 2022 at about $2,200 per month.
The average year-to-date increase in rents across Los Angeles sat at about 5.0% at the end of Q3 2022, still signaling strong demand for Los Angeles multifamily housing.
Market Indicators & Historical Los Angeles Data
Net absorption for multifamily units in Los Angeles peaked in Q3 2021 at nearly 10,000 units absorbed in the quarter despite surprisingly negative multifamily absorption data in Q3 2022.
Multifamily absorption fell significantly in Q2 and Q3 2022 compared to Q3 2021’s peak but still remained comparatively strong at 2,200 and 3,200 units absorbed, respectively.
Due to the pandemic, occupancy rates in Los Angeles fell below 95% in Q3 2020 for the first time in nearly ten years, then continued to climb, reaching nearly 97% in Q3 2022. The increase in occupancy rates between 2020 and 2022 was nearly 2.50%.
The Los Angeles unemployment rate climbed to nearly 5.0% in Q3 2022, signaling a loosening job market in the county. More residents have entered the Los Angeles job market since.
Multifamily Development Activity in Los Angeles
Nearly 34,000 new multifamily units in Los Angeles were reported as under construction at the end of Q3 2022. This is a year-to-date increase over Q3 2021 but a slight quarterly decrease from Q2 2022.
Approximately 2,500 new multifamily units were delivered to Los Angeles’s multifamily market in Q3 2022, a slight year-over-year decrease but a significant quarterly increase from Q2 2022. About 3,000 new units were delivered to Los Angeles in Q3 2021; about 2,000 new units were delivered to the market in Q2 2022.
Some significant multifamily developments in Los Angeles include:
- G.H. Palmer’s development of 1,150 new multifamily units in Ferrante, Los Angeles;
- Oakmont Capital’s development of 205 new multifamily units in Venue, Los Angeles;
- CityView’s development of 265 new multifamily units in South Bay X, Gardena; and
- Mitsui Fudosan Co.’s development of 438 new multifamily units at 8th & Figueroa, Los Angeles.
Scheduled completion for all of these new multifamily developments stretches between Q4 2022 and Q1 2025.
New Multifamily Deliveries in Los Angeles
New multifamily deliveries in Los Angeles have been on the decline since Q2 2021, when they peaked at nearly 6,000 units. Q1 2022’s deliveries peaked again at nearly 4,000 new units delivered but have declined down to about 2,000 in Q3 2022.
Methodology
All figures presented in this article are based on MyEListing.com’s commercial real estate listing data in corroboration with other freely available data and information covering the commercial real estate industry.
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