R
ents in greater Los Angeles have declined, except for luxury apartments, where vacancies have reached 13.1 percent. Across Los Angeles County, rents dipped 0.3 percent to $2,232 in the third quarter from the previous period, but rose 0.6 percent year-over-year to $2,218. Apartment vacancy rates fell to 4.7 percent, down from 5 percent.

    However, luxury apartments are struggling with diminishing demand due to high prices and limited discretionary income. Among the 65,809 luxury units built since 2020, 8,510 remain vacant. Developers are now offering concessions to attract tenants, indicating that high-end rentals may not be as lucrative as expected.

    A slowdown in new multifamily construction could lead to increased demand and higher rents in the future. According to NAI Capital, new unit completions dropped by 25 percent this fall compared to summer, and 29.7 percent year-over-year. The USC Casden Real Estate Economics Forecast predicts near-term rent growth of 1 percent next year and 2 percent in 2026.

    The forecast also projects a $110-$148 monthly increase in rents across the five-county Southland over the next few years, with tenants paying an additional $58 per month in Los Angeles County. By mid-2026, the average apartment rent in Los Angeles County is expected to rise to $2,334, a 3 percent increase from last summer.

    Investors are focusing on the lack of new supply and rental housing shortage in the county, which could lead to meaningful rent growth over the next couple of years.