LA Multifamily Demand Turns Negative as Construction Remains Robust
The fourth quarter was a shaky one for multifamily in Los Angeles ? from demand to vacancy.
Net absorption flipped from positive 2,619 units in the 12 months prior to -190 units. The Westside submarket saw the worst results (-137), followed by the East submarket (-123).
Occupancy plunged by 80 basis points year-over-year to 94.5 percent.
Another notable negative trend was sales dropping by 21 percent to $6.3 billion, with average price per unit seeing a more modest one percent dip to $352,501.
Moreover, average rents per unit dropped by 0.2 percent to $2,279.
Supply appears to be causing some of the headaches for multifamily landlords in LA. In all of 2025, deliveries totaled 14,563 units, representing a 17 percent increase from the previous year.
"Since Q4 2020, Los Angeles County has delivered 70,594 units to the marketplace," Colliers said.
While construction remains "robust" at 26,720 units, according to Colliers, it does appear to at least be slowing down. More than 32,000 units were underway a year ago.
Cap rates in the fourth quarter averaged 5.7 percent, which is down 10 basis points from the previous three months but up 60 basis points year-over-year.
Source: GlobeSt/ALM