First Quarter 2025
Rents Hit Record High While New Supply Shrinks in Ventura County Multifamily Market
With vacancy down to 3.4% and construction accelerating, developers and investors face mixed signals in a high-cost, low-volume environment.
These trends reflect an evolving market where rising construction activity contrasts with elevated rent and shifting investor sentiment.
MARKET OVERVIEW
In Q1 2025, Ventura County’s multifamily housing market reflected shifting dynamics. The number of vacant units declined by 8.7% quarter-over-quarter and 19.0% year-over-year, totaling 1,730. Developers added just 122 new units during the quarter, down from 278 in the previous quarter and 938 in Q1 2024. Year-over-year, unit deliveries fell by 87.0%, highlighting a significant slowdown in new supply. These trends were reflected in the vacancy rate, which fell by 30 basis points quarter-over-quarter and 90 basis points year-over-year to 3.4%.
Average asking rents increased by 1.6% quarter-over-quarter and 2.5% year-over-year to $2,642 per unit, marking a new all-time high following a slight pullback in mid-2024. Despite headwinds such as high interest rates and rising construction costs, rent growth is once again trending upward, and Ventura County is experiencing a percolating wave of new development. As of Q1 2025, 1,956 units were under construction—a 0.6% increase from the prior quarter and a 76.4% surge year-over-year.
Sales activity in Q1 2025 presented a mixed picture. Transaction volume fell 77.1% from the previous quarter and 85.5% year-over-year to just over $28.7 million. The average sale price per unit declined 7.7% quarter-over-quarter to $319,167. Regionwide, the number of units sold dropped 6.7% year-over-year. Meanwhile, the average capitalization rate declined 30 basis points year-over-year to 4.4%.
These trends reflect an evolving market where rising construction activity contrasts with accelerating rent growth, decreasing vacancies, and shifting investment performance.
TRENDS TO WATCH
Ventura County’s multifamily market fundamentals are expected to remain steady as they adjust to economic shifts, employment trends, and the ongoing challenge of homeownership affordability. While these factors continue to support rental market growth, the pace has slowly picked up. Rising borrowing costs have heightened financial risks, yet demand persists in select asset classes—even as growth prospects appear more restrained.
In Q1, the Ventura County multifamily market recorded no property sales over 100 units. The largest transaction of the quarter involved a 50-unit property: Interstate Equities Corporation sold the 850 Warwick Avenue apartment complex—Arrive on the Hill in Thousand Oaks—to FPA Multifamily LLC for $18.2 million, or approximately $364,000 per unit, highlighting continued appetite for stabilized, value-add opportunities.
Interstate Equities originally acquired the property in 2021 for a reported $16.1 million, or $322,000 per unit. The asset was fully leased at the time of sale. Some deferred maintenance remained, including seismic retrofitting, exterior painting, upgrades to common areas, and other rehabilitation work.
Investors are adapting to higher borrowing costs, as reflected in the volatility of deal sizes. The average deal size in Q1 2025 dropped to $3.59 million—an 80.0% decrease from the previous quarter and an 83.7% decline year-over-year. With inflation expected to moderate and interest rates projected to ease from recent highs, investor and developer confidence is anticipated to improve.
The multifamily market will continue to evolve alongside broader economic forces and demographic trends. With home prices and mortgage rates remaining elevated, homeownership remains out of reach for many, sustaining rental demand. However, future rent growth may place pressure on pricing as investors navigate supply imbalances and shifting demand.
