Los Angeles is famous for star sightings, iconic beaches, and vibrant culture. It’s one of the most desirable places to live in the country, but all those attractions come with a price: sky-high housing costs that make both renting and owning a home a challenge.
Whether you’re a renter trying to stretch your budget or a property owner strategizing your investments, understanding the latest housing stats is essential for navigating the fast-moving LA market–and in this piece, we’ll give you the valuable context you need to make the right decision.
LA Rental and Housing Market Statistics
As one of the premier cities in a state with the fourth-highest rent rates, you can expect a high cost of living in and around LA. But if you’re looking to move to the area or invest in an LA rental property, looking at the current trends can help you find the right time to take the leap.
Here are some important stats to know and how they’ll affect you.
In 2019, the median home value in LA was $600,000, now as of October 2024, it’s the highest it’s ever been at $956,210
LA’s soaring home values tell a clear story: demand for housing in the city remains incredibly high, even as affordability becomes an increasing concern. The combination of limited housing supply and a population eager to live in this iconic city keeps prices high.
High home prices are great for existing property owners, including those who rent their property out, but new homebuyers and renters get the short end of the stick. Investors can still benefit from the high demand for the area, though.
Median Home Prices in LA did drop to $800,000 in May 2024
Los Angeles provided a quick reprieve to homebuyers and investors in May of 2024, but it didn’t last long. These dips can happen throughout the year based on inflation figures, political changes, environmental concerns, and other economic factors, so keep an eye on your favorite areas of LA for the chance at a limited-time deal.
Rents continue to climb in LA with the median rental rate going for $2300 in 2020 to now $2,841 in 2024
If you feel like rents in LA are getting out of control, you’re not alone. The numbers back it up, showing a 23% increase in just four short years that reflects the inflationary market as a whole, the demand for LA living, and a low supply of homes for sale at affordable rates.
At the current rates, landlords should expect multi-tenant leases and most renters will want to find a roommate to split costs with.
The Sylmar area of LA had the highest foreclosure rate on properties with 59 in 2024
Los Angeles and “affordable” don’t usually appear in the same sentence, but areas like Sylmar that are experiencing more foreclosures offer an investment opportunity and the potential for lower rental rates as homeowners try to find ways to cover their mortgages.
LA home values are rising, but more lower-end properties are selling
The high demand for the LA lifestyle has driven home values and prices up in past years, leading to a 1.9% increase in the past year. However, the median listing price has fallen 2.9% to $1.2 million, which may mean sellers are recognizing a shift away from the seller’s market we’ve been in the past few years.
At the same time, the average sale price rose to $1 million – 16% lower than the listing price– which points to lower-end homes selling more frequently than high-end properties ($1.2 million or more) as budgets decrease and living costs rise, impacting those with less equity more significantly.
In November 2024, there were 8,661 homes for sale, a slight 0.6% decrease from October 2024
LA’s number of available homes staying consistent means supply and demand are about the same, likely due to home prices increasing and tempting homeowners to sell to new residents. If prices start to fall more steadily, the demand could quickly overwhelm supply and slowly reduce the available inventory on the market.
The Los Angeles market is slowing down as properties stay on the market longer
There’s always going to be demand for homes in LA, but sellers’ price expectations may have outgrown buyers’ budgets as properties have started to sit on the market for longer.
As of November 2024, homes averaged 38 days on the market – a 14.2% increase from the previous year. As a result, 16.7% fewer houses sold (1,346) in November than the previous month.
It’s possible that buyers don’t see the value in buying an LA home currently and are waiting for the market to cool off. Alternatively, they may be scared off by 7% interest rates that can significantly increase costs over the duration of a mortgage when compared to lower rates.
Recent data indicates that Los Angeles is experiencing a population decline. As of 2024, the city’s population is approximately 3,795,936, reflecting a 0.65% annual decrease and a 2.56% drop since the 2020 census, which recorded 3,895,848 residents
LA remains an attractive destination for many, but high costs are pushing residents to seek more affordable living in other cities or states. This means there’s less competition for tenants seeking a rental and fewer applicants for property owners, which can lead to tenant-friendly pricing or require landlords to make their property appealing in other ways, like amenities.
74% of apartment prices are above $2,101
Nearly three-quarters of rental listings in LA exceed $2,101 a month, making it one of the most expensive rental markets in the country. However, the cost for two- and three-bedroom properties generally increases by hundreds rather than thousands, which can make roommate situations better for renters.
For landlords, high rent means a better ROI–as long as you can attract tenants and keep the property occupied.
Navigating the LA Rental Market’s Landscape
For renters, the LA housing market requires creativity and flexibility. Whether that means finding roommates, exploring less trendy neighborhoods, or timing your move to align with dips in rental demand, understanding the local market can help you stretch your budget.
For landlords, LA’s housing market is full of opportunity, but staying competitive is key. Investing in property upgrades, offering flexible lease terms, or catering to specific tenant needs can help you attract and retain renters in a challenging market. Fortunately, if you’ve owned your property since 2020 or earlier, you’ve already achieved a great return.
The Los Angeles rental and housing market continues to evolve, but one thing remains certain: whether you’re renting, buying, or investing, preparation and research are your best tools for navigating this complex market.
Not ready to become an LA expert to maximize your rental property investment? RentalHouse can help. Our Los Angeles property management services offer peace of mind by finding you high-quality tenants at top-market rates so you can enjoy consistent, stress-free income. We also work to add value to your property that far exceeds our management fees, including identifying cost-effective improvements to increase demand or income potential, proactive maintenance to avoid costly repairs, and simplified financial management so you can focus on more important things.
Reach out today to start optimizing your investment property!