Q3 2023 Multifamily Market Outlook – Los Angeles


An influx of new multifamily construction is reshaping Los Angeles County’s multifamily market as
eviction protections become a thing of the past. In Q3 2023, the vacancy rate increased by 70 basis
points compared to the previous year, reaching 4.5 percent. The primary factor driving this trend is the
completion of construction projects, with a remarkable annual increase of 54.9 percent year to date.
However, developers are slowing down as there has been a 16.1 percent annual decrease in the number
of units under construction.


The Federal Reserve’s interest rate increase remains a significant influence on the multifamily market,
resulting in reduced demand for investment and the imposition of constraints on financing options for
developers and investors. As credit conditions tighten, the multifamily market is adapting to increased
borrowing costs, substantial inflation, a less robust growth outlook, and heightened financial risks. In Q3,
every submarket in L.A. County has observed a double-digit increase in vacant units year to date, while
sales volume has plummeted by 61.4 percent.