Q4 2022 Multifamily Market Outlook – Los Angeles
Los Angeles County multifamily market rent eased 0.3 percent in Q4 2022 compared with the prior quarter, marking the first quarter over quarter deceleration since the pandemic shutdown of 2020. The average asking rent, a measurement of what renters pay for rental units of all sizes combined, rose on an annual basis at its slowest pace since 2021. Rent’s annual growth rate of 3.2 percent from Q4 2021 to $2,127 per unit was well below 6.3 percent in Q4 2021 from Q4 2020. Yearend data showed that while rents continued to be high, LA County’s multifamily market ended 2022 with rent cooling, based on the quarter over quarter change in the average asking rent per unit.
TRENDS TO WATCH
With interest rates surging, homeownership has not only become out of reach for many borrows in the rental market investors too are getting squeezed. While investors stayed active during the first half of 2022, sales volume in the second half of the year plummeted 35.9 percent. With financing harder to obtain in the latter half of the year and further interest rates hikes anticipated, sales volume in Q4 2022 fell 12.7 percent quarter over quarter and 52.5 percent when compared to Q4 2021.