Los Angeles’ multi-family market has entered a prolonged phase of minimal rent growth, with eight consecutive quarters through Q2 2025 posting gains of less than 1%. This marks the longest such stretch in more than a decade. Quarterly increases have stayed within a narrow 50-basis-point range, reflecting a market that’s plateaued rather than one that’s correcting.
For context, the only comparable period in recent memory occurred from late 2017 through 2018, when rent growth held steady between 3.0% and 3.4% annually. But that earlier phase was far more robust—3% is widely regarded as a sign of a healthy market. By contrast, the current two-year average annual rent increase sits at just 0.68%, well below Los Angeles’ long-term average of 2.7%.
Diverging Trends Across Asset Classes and Submarkets
This deceleration isn’t being felt equally across asset classes. Higher-end properties, classified as four- and five-star assets, have largely followed the metro-wide trend of slow but positive growth. Lower-tier buildings, however, are seeing a different pattern: one- to three-star properties have begun experiencing rent declines, pointing to growing softness in more affordability-focused segments.
Yet despite sluggish growth, asking rents have reached new highs. The average asking rent in Los Angeles now stands at $2,320 per unit—about 31% higher than the national average of $1,775. While this reflects the city’s premium housing market, it also underscores the affordability challenges for renters and the fine line property owners must walk when setting rates in a cooler demand environment.
Not all parts of the city are following the broader trend. South Los Angeles, for example, has emerged as a clear outlier. Over the past two years, the submarket has maintained an average annual rent growth rate of 2.8%, without recording a single quarter of negative growth in the past decade. Vacancy remains low at just 3.0%, and new supply is scarce—only 560 units have been delivered in the area over the past 10 years. With most of the neighborhood zoned for single-family homes, the barriers to new multi-family development are high, supporting continued rent strength. South LA’s average rent currently sits at $2,042, offering a roughly 15% discount relative to the citywide average.
On the other hand, Koreatown—a dense and centrally located submarket—has seen a sharp reversal. Over the past eight quarters, rents have declined by an average of 4.3% annually. The submarket also leads the metro in new construction activity, with a wave of supply potentially overwhelming demand and pushing rents downward.
Navigating a Market of Slow Growth
A combination of factors appears to be contributing to the city’s overall rent stagnation. Population outflows to more affordable regions have reduced the renter pool, while job losses in key sectors like tech and entertainment have further softened demand. In response, many landlords are choosing not to push rents, focusing instead on tenant retention and occupancy stability.
As the market continues to evolve, investors and operators will need to take a more granular approach—closely tracking submarket performance, supply pipelines, and shifting demographic trends to navigate this extended period of slow growth.
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