July 12, 2023

SoCal 1Q23 Multifamily Market Insights Report: Tight conditions persist, despite a slow start to 2023

Highlights:

Multifamily fundamentals in Southern California cooled slightly at the opening of 2023. Vacancies inched higher, while rents dipped. Developers remain active with projects totaling 38,255 units currently under construction throughout the region.
Vacancy across Southern California increased 20 basis points during the first quarter to 3.6%. Despite the recent uptick, the vacancy rate has tightened by 10 basis points year over year. Vacancy in Southern California typically operates in a fairly tight range in the low-to-mid 3% range.
Asking rents trended lower at the start of the year, dropping 1.5% during the first quarter to $2,342 per month. Despite the recent dip, the region maintains some of the most expensive rents in the country. Average rents throughout Southern California have risen 6.1% during the past 12 months.
Multifamily sales activity continued to slow during the first quarter. The number of deals in the last three months dropped 14% from levels recorded at the end of 2022. The median sales price to this point in the year is $259,200 per unit, down 22% from last year’s figure.