Los Angeles apartment owners have been asking the same question all year: has the market turned? The latest third-party reports say we’re close, though not all the way there. Values have reset, sales are picking up, and supply is starting to ease. Rents, however, are still flat.
Here’s where the numbers stand going into the end of 2026.
Cap rates have kept rising. CoStar data published by Kidder Mathews puts the average Los Angeles multifamily cap rate at 5.9% in the third quarter, up from 5.5% a year earlier. Matthews, which uses a different data set, had cap rates at 5.37% in the second quarter, up for a sixth straight quarter.
Price per unit has moved the other way. Kidder Mathews reports an average of about $281,600 per unit in the third quarter, down 7.2% from a year ago. Matthews puts the second-quarter average at $308,551, about 13.9% below the 2022 peak.
Lower prices have brought buyers back. Matthews counts more than $9.3 billion in Los Angeles multifamily sales over the twelve months ending in June, up 35.2% from the year before. That is still well below the $13.0 billion peak in 2022, but it’s a real recovery from the recent slowdown.
Earlier this year Matthews wrote that pricing appears to have bottomed and that cap rate expansion is “largely complete,” but that any recovery in values is expected to be gradual, with prior peak pricing unlikely before 2029. We think that’s a fair read. The repricing is mostly behind us. A quick rebound isn’t likely.
New construction has been the biggest drag on rents. Matthews has 2026 on track to be the metro’s biggest year for new apartment deliveries since 2000, with 9,105 units completed in the twelve months ending in June. Kidder Mathews counted another 4,136 units delivered in the third quarter alone.
That wave is starting to crest. Kidder Mathews reports that deliveries so far this year are down 18.4% from the same period in 2025, and that units under construction have dropped 11% from a year ago, to about 24,300. A smaller pipeline means less new competition for existing buildings over the next couple of years.
The market has absorbed most of the new supply. Vacancy is about 5.4% per Kidder Mathews, roughly where it was a year ago. Matthews measures it lower, at 4.5%, and expects 4.4% by year end. The two figures differ because the firms define and measure vacancy differently. Both show a market that is stable, not slipping.
Rent growth is the weak spot. Kidder Mathews has average asking rent at $2,323 a month, up just 0.6% from a year ago. Matthews puts effective rent up 0.8%. Many buildings in the city are also under the Rent Stabilization Ordinance, where this year’s allowable increase is 3%. That leaves limited room for owners to grow income.
Northmarq summed up the outlook this way: Los Angeles is “poised for a year of mostly stable performance,” with transaction counts continuing to climb, though it may take until 2027 or 2028 for sales to return to historical norms.
Market averages only go so far. Your building’s value depends on its location, unit mix, rents and condition. If you’d like to know where your property stands today, request a free property evaluation and we’ll walk you through recent sales near you and what buyers are paying now.
Sources: Kidder Mathews Los Angeles Multifamily Market Report, 3Q 2026 (CoStar data); Matthews Los Angeles Multifamily Market Reports, Q1 and Q2 2026; Northmarq, “Los Angeles multifamily sales activity picks up entering 2026” (June 2026).
Peter James
Peter James is a First Vice President at Lyon Stahl Investment Real Estate and Co-Founder of The James Group, a leading Los Angeles, based investment brokerage team specializing in the sale of multifamily properties. Since beginning his career in 2007, Peter has built a strong reputation as a trusted advisor in the Los Angeles apartment market, with deep experience across the Westside and surrounding submarkets.
Peter advises investors on the acquisition and disposition of multifamily assets throughout Los Angeles County. His approach combines detailed financial analysis, real-time market insight, and a clear understanding of investor objectives, allowing him to guide clients through both straightforward and highly complex transactions.
In addition to traditional multifamily brokerage, Peter has extensive experience structuring and executing 1031 exchanges, including transitions into single-tenant NNN properties and Delaware Statutory Trust (DST) investments nationwide. His ability to navigate tax-deferred strategies and long-term portfolio planning has helped clients preserve capital, increase cash flow, and achieve greater flexibility across market cycles.
As Co-Founder of The James Group, Peter has helped build a collaborative, high-performing team known for integrity, disciplined execution, and market expertise. He maintains strong working relationships with lenders, attorneys, and qualified intermediaries, ensuring that each transaction is coordinated efficiently and aligned with his clients’ broader financial and investment goals.
Outside of real estate, Peter enjoys spending time outdoors with his wife, Jessica, and their daughters, Dylan and Daphne. Whether surfing, snowboarding, or exploring the California coast and mountains, family and an active lifestyle remain central to his life. Peter is a graduate of the University of California, Riverside.
