Investment in multi-family housing in Los Angeles County picked up noticeably after the third quarter. Transaction volume for residential complexes with at least 50 units reached 3.3 billion US dollars in the year to date. This represents an increase of 44 per cent compared to the same period last year. At the same time, the average sale price fell to 357,085 US dollars per unit, according to a recent market report by property services firm Colliers.
While sales activity is picking up significantly again, the operational performance metrics of existing properties remain largely stagnant. The average occupancy rate in Greater Los Angeles was unchanged in the third quarter at 94.1 per cent, compared with 94.4 per cent in the previous year. Although the effective monthly average rent rose marginally by 6 US dollars quarter on quarter to 2,428 US dollars per unit, it remains at exactly the level of the third quarter of 2025.
New completions weigh on rental momentum
Colliers attributes the stagnant rental prices and the slight decline in occupancy to the wave of completions in recent months. Developers brought 4,277 new units to market in the third quarter, representing an increase of around 72 per cent compared with the second quarter. Net absorption picked up significantly in parallel, reaching 3,809 units, compared with 2,429 flats in the previous quarter and 2,360 units a year ago.
Despite the recent completions, a noticeable tightening of supply is emerging in the medium term. At the end of the third quarter, 23,426 flats were under construction, down from 24,877 in the previous quarter and 25,421 units in the corresponding period of the previous year. More than 58,800 flats have been completed across the county since the second quarter of 2021.
Heterogeneous performance across submarkets
At the neighbourhood level, significant differences emerge regarding rents and vacancy rates:
- —Westside: With an effective monthly rent of 3,336 US dollars and an occupancy rate of 92.9 per cent, the submarket remains the most expensive area, but it also records the largest development pipeline with 5,894 units under construction.
- —Hollywood and Mid-Wilshire: Rents averaged 2,355 US dollars with an occupancy rate of 92 per cent, while 1,869 units came onto the market and a further 5,113 units are under construction.
- —Downtown and Central L.A.: With 91.7 per cent, the area recorded the lowest occupancy in the region, despite an annual increase of 1.1 percentage points.
- —South L.A. and South Bay: South L.A. showed the highest occupancy rate at 96.6 per cent with average rents of 1,996 US dollars, followed by South Bay with 95.8 per cent occupancy and 2,436 US dollars in monthly rent.
Demand for rental housing in the Greater Los Angeles area remains fundamentally intact, but is balanced in the short term by the recent high volume of completions. Landlords are only likely to regain greater scope for rental growth once the foreseeable decline in construction activity takes effect.
