Los Angeles apartment values have softened over the past year while rents have held roughly flat. Fewer new units are being built, which supports existing buildings over time. Here is where the market stood at the end of Q3 2026.
The numbers
| Metric (LA metro) | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
| Average cap rate | 5.9% | 5.5% | +40 bps |
| Average price per unit | $281,576 | $303,283 | -7.2% |
| Vacancy | 5.4% | 5.2% | +20 bps |
| Average asking rent | $2,323 | $2,310 | +0.6% |
| Units under construction | 24,325 | 27,324 | -11.0% |
Source: Kidder Mathews, Los Angeles Multifamily Market Report, 3Q 2026. Metro-wide averages; individual submarkets and building types vary widely.
What is driving it
- Higher interest rates. Most apartment loans are priced over the 5- or 10-year Treasury. When borrowing costs rise, buyers need a higher cap rate to make the numbers work, which pushes prices down. See today's rates on our homepage.
- Flat rents. Asking rents grew less than 1% over the year, so income growth is not offsetting higher cap rates.
- Rent regulation. The City of Los Angeles changed its RSO formula in 2026 and capped increases at 3% for July 2026 to June 2027. Buyers of rent-controlled buildings underwrite slower rent growth.
- Measure ULA. The City of LA transfer tax still applies above $5.4 million. A proposed exemption for new multifamily buildings was shelved by the City Council on July 1, 2026, so sellers above the thresholds should plan for it.
- Less new supply. Construction and deliveries are both down from 2025. Over time, fewer new units tends to support occupancy and rents for existing buildings.
What it means if you own a building
- Pricing matters more than ever. Buyers are disciplined. A building priced on last year's cap rates will sit. A well-priced building with clean financials still attracts multiple offers.
- Location and city rules split the market. Buildings outside the City of LA (Glendale, Burbank, Long Beach, the South Bay) avoid Measure ULA, and buildings under AB 1482 instead of local rent control have more room to grow rents.
- Upside sells. Below-market rents, ADU potential and units that can be renovated on turnover are what buyers pay up for.
- Timing your exit. If you plan a 1031 exchange, softer pricing helps on the buy side too. What matters is the spread between what you sell and what you buy.
Want to know what your building is worth in this market? Request a free broker opinion of value.
Common questions
What is the average cap rate for Los Angeles apartment buildings in 2026?
About 5.9% metro-wide in Q3 2026, according to Kidder Mathews, up from 5.5% a year earlier. Cap rates vary by submarket, building size and rent control status.
Are LA apartment prices going down?
Average price per unit fell about 7% from Q3 2025 to Q3 2026, to roughly $281,600 per unit, mainly because of higher interest rates and flat rents.
Sources
- Kidder Mathews, Los Angeles Multifamily Market Report 3Q 2026
- BOMA: What Los Angeles' ULA decision means (July 2026)
General information for Los Angeles County owners, not legal or tax advice. Laws and figures change; confirm with the agency, your attorney or your CPA before acting.