If you own an apartment building in Los Angeles, here’s the bottom line: the market is stable, but it’s not what it was five years ago—and that’s not necessarily a bad thing. This post breaks down the latest CoStar data and explains what it means for you as an investor or landlord in LA.
Download the full report here.
Quick Summary
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Vacancy: Down slightly to 4.8%, signaling balanced demand.
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Rents: Up a modest 0.8% year-over-year—below the national average.
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Construction: Slowing. Only 6,000–7,000 new units forecasted for 2025.
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Sales: Prices appear to have bottomed; private buyers are driving the activity.
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Outlook: Stable fundamentals, with 2% rent growth expected by end of 2025
Key Market Highlights
Renter Demand Is Back—Sort Of
While demand improved in early 2025, it’s still among the weakest of any major U.S. city. Higher-income renters are fueling what activity there is—especially in newer 4 & 5 Star properties. Renters with means are choosing quality, and that’s where absorption is happening.
Vacancy Has Ticked Down
Vacancy dropped from 5.0% to 4.8%, which sounds small—but in a market as large as LA, that’s significant. Demand has mostly kept pace with deliveries, and occupancies are trending flat for 2025.
Rent Growth? Modest, But Positive
We’re seeing 0.8% year-over-year growth in asking rents, below the 1.1% national average. Still, this is slightly better than Q1 last year. Forecasts call for that number to grow to ~2% by year’s end.
Construction is Cooling Off
The pipeline dropped from 27,000 units in early 2023 to 19,000 now. That’s only 1.8% of inventory, compared to 3.2% nationally. That slower pace is a tailwind for landlords—it reduces the chance of being undercut by shiny new inventory.
Private Capital is Back
Private buyers made 75% of recent acquisitions, hunting for deals in desirable neighborhoods. Institutional players have stepped back, largely due to LA’s regulatory climate and the ULA transfer tax. Still, market sentiment is improving, and CoStar expects values to gradually rise over the next few years.
What This Means for Los Angeles Apartment Owners
Here’s the read-between-the-lines analysis:
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If you own a 4 & 5 Star building, you’re in the best position. These assets are seeing real renter demand and better rent growth.
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If you own a 3 Star or older asset, tread carefully. Budget-conscious renters are still struggling, and turnover will remain a challenge.
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Now may be the time to reposition or renovate—with fewer new deliveries ahead, well-located and upgraded assets can win in this flatter market.
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If you’re thinking of selling, you’re not too early. Prices likely bottomed in 2024. And with less inventory coming online, buyers are already circling.
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The buyer pool has changed—Private investors, family offices, and syndicators are taking the wheel. The institutional crowd is watching from the sidelines, at least for now.
What To Do About It
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Audit your rent roll. Are you aligned with the current market? Especially for stabilized or under-managed assets, there could be room to push rents—modestly and strategically.
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Evaluate refinancing options, especially if you’re sitting on a low-basis property. Even with high rates, equity can still be unlocked.
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Start exit planning early. If you’re considering a sale in the next 12–24 months, now is the time to understand buyer sentiment, market comps, and capital gains implications.
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Stay visible. The quieter the market gets, the more attention goes to those who show up consistently. Whether you’re leasing, refinancing, or planning a sale, visibility matters.
What To Do Next
If you’re unsure what this shifting market means for your property—don’t guess.
Call us.
We’ll walk you through:
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What your building is worth today
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What kind of buyers are active right now
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What updates (if any) would actually improve value
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Whether it’s smarter to hold, refinance, or sell
No pressure. No hard pitch. Just real advice based on what’s happening right now in Los Angeles.
📞 Call us at (916) 996-4421
📩 Or email taylor@thegroupcre.com
🌐 Schedule a free strategy call
Don’t wait until the next interest rate spike or rent control proposal. Let’s get ahead of the market—together.
Taylor Avakian is a multifamily investment expert and the host of No Vacancy, a podcast dedicated to exploring the latest trends, strategies, and insights in the real estate market. As the founder of The Group CRE, Taylor specializes in helping landlords and investors navigate the complexities of multifamily ownership in Los Angeles.