Los Angeles Multifamily Report – November 2022
While rent growth is decelerating, the market is displaying overall healthy fundamentals.
Los Angeles rent evolution, click to enlarge
Amid fears of a recession and high inflation, most U.S. metros recorded a slowdown in multifamily rent development, cooling off after record gains last year. Los Angeles followed this pattern, with rent growth slipping to 0.4 percent on a trailing three-month (T3) basis through September. Average rents of $2,588, however, remained well above the $1,718 national average. Demand also remained relatively strong. The occupancy rate in stabilized properties stood at a healthy 96.7 percent as of August.
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Los Angeles sales volume and number of properties sold, click to enlarge
The metro’s unemployment rate held at 4.5 percent as of August, above the nation’s 3.7 percent. California regained nearly all jobs lost during the height of the pandemic, according to the state’s Employment Development Department. During the 12 months ending in July, Los Angeles added 174,000 jobs, representing a 5.8 percent expansion. All sectors recorded gains, except for government, which lost 5,500 positions. The largest increases were in leisure and hospitality (37,600 jobs), trade, transportation and utilities (34,100 jobs) and education and health services (32,000 jobs).
Investment remained strong, with $4.6 billion in sales year-to-date through September, up more than 50 percent compared to the same time frame last year. Completions slowed, with 5,773 units added through September, or 1.3 percent of existing stock, 20 basis points below the U.S. rate and down 36 percent from 2021.
