In 2023, Los Angeles is currently the largest city in California and the 2nd largest city in the United States.
Los Angeles is one of the most populous cities in the United States, known for its diverse culture, entertainment industry, and thriving business environment. Los Angeles is a city in California that consists of 272 neighborhoods and is especially known for famous and influential neighborhoods like Hollywood, Bel Air, Santa Monica, Downtown Los Angeles, and more.
With the steady growth of the rental market in Los Angeles, it is no surprise that more and more people are looking to invest in a second property or enter the Los Angeles market for the first time.
In this comprehensive overview of the Los Angeles rental market forecast for 2023, we'll provide you with the latest data, trends, and insights to help you make informed decisions. Let's dive in.
Please note that any information provided by Doorstead is intended for informational purposes only and should not be taken as financial or investment advice. We strongly advise you to consult a qualified financial or investment professional before making any tangible financial decisions or investments. With that in mind, keep reading to learn more about the rental market outlook for Los Angeles in 2023.
According to the United States Census Bureau, the population of Los Angeles in 2021 was approximately 3.8 million, with a median household income of $62,142. As a city with a high cost of living, the rental market in Los Angeles has experienced substantial changes over the past years. The COVID-19 pandemic impacted the market significantly, leading to fluctuations in rental prices and demand.
According to United Dwelling, the main impacts on the Los Angeles Rental market from COVID-19 were:
"-decline in single-family housing
-mortgage rates have gone lower
-the rental market has slowed
-more people are apartment hunting
-commercial leasing and investment sales have declined”
During COVID-19, the City of Los Angeles put in a local COVID emergency order who protected tenants from eviction for non-payment of rent from March 1, 2020, to August 31, 2020.
This local emergency order expired January 31, 2023, and beginning February 1, tenants must pay the full current rent in order to avoid eviction. You can view more information about COVID-19 Renter Protections from the Los Angeles Housing Department website.
Los Angeles is home to a diverse population, including many families who rent rather than own their homes.
According to recent data from the U.S. Census Bureau, the owner-occupied housing unit rate in Los Angeles from 2017-2021 was 36.9%.
According to more recent data from RentCafe, 63% (874,191) of the households in Los Angeles are renter-occupied, while 37% (510,660) are owner-occupied.
One of the reasons that families are choosing to rent in Los Angeles is the high cost of homeownership. The median home value in the city has a median value of 705,900, according to the U.S. Census Bureau, which is out of reach for many families. By renting, families can still enjoy many benefits of living in Los Angeles without the high cost of owning a home.
Another reason that families are choosing to rent in Los Angeles is the quality of the city's rental stock.
Many rental properties in Los Angeles are large, spacious, and well-maintained, making them an excellent option for families who need more space. Additionally, many rental properties in the city offer amenities such as pools, gyms, and playgrounds, which are particularly attractive to families with young children.
In terms of demographics, families who rent in Los Angeles come from a variety of backgrounds.
Overall, the rental market in Los Angeles is an excellent option for families looking for a high-quality, affordable place to live.
By working with a property management company like Doorstead, families can find a rental property that meets their needs and enjoy the benefits of renting in one of the most vibrant and exciting cities in the world.
The Los Angeles rental market is one of the most expensive in the country.
In 2023, the average rent for an apartment in Los Angeles is $2,786, according to RentCafe.
According to Rent.com, the average rent for a studio in Los Angeles is $2,367, a 6+$ annual change.
The average rent for a one-bedroom apartment is $2,828, a 6+% increase.
The average rent for a two-bedroom apartment is $3,802, a 8+% increase.
These high rental rates are due to the high demand for housing in the city as the population continues to grow.
Experts predict that rental rates in Los Angeles will continue to rise in 2023, albeit slower. Factors contributing to this growth include economic recovery, increased demand for rental properties, and low vacancy rates.
As the city recovers from the pandemic, the demand for rental properties is expected to increase. Remote work has become more common, with many employees relocating to areas with lower living costs or more desirable amenities. As a result, the Los Angeles rental market is likely to experience an influx of renters seeking better housing options within the city and its surrounding areas.
With mortgage expenses nearly doubling since a year ago, combined with a chronic housing shortage, rental demand will remain strong in Los Angeles in 2023, according to CNBC. According to USC’s Lusk Center for Real Estate, limited new construction and rising interest rates will increase costs for renters.
Remember that rising interest rates, inflation, and uncertain social and employment trends always make it difficult to predict the future.
According to data from the Southern California News Group, rental prices in large complexes across Southern California have seen huge gains, while vacancy rates have dropped to a 22-year low.
Vacancy rates fell to the lowest level in the spring of 2022, after a slight uptick in Q4 of 2021. The average vacancy rates were 2.2 percent in Orange County, 2.3 percent in the Inland Empire, and 3.3 percent in Los Angeles County.
These record-low vacancy rates could decline even more in 2023 as more people return to the city and demand for rental properties increases. Lower vacancy rates (under 5 percent) typically lead to higher rental prices as the supply of available units decreases.
Certain neighborhoods within Los Angeles are expected to experience increased demand, while others may see rental prices stabilize or decline.
Some popular neighborhoods in recent years are Culver City, Koreatown, Westwood, Downtown, and West Hollywood. These trends will likely continue in 2023, with neighborhoods offering desirable amenities, job opportunities, and proximity to public transportation experiencing increased demand and higher rental rates.
The Los Angeles Times has a great interactive Population Density map where you can see where each neighborhood ranks.
You can also look at specific plan area reports for each community in Los Angeles with detailed demographic breakdowns of each neighborhood on Los Angeles City Planning.
We’ve also put together a list of some of the best neighborhoods to invest in in West Los Angeles for long-term value.
According to data from California Association of Realtors, the median home price dropped 2.8% from the previous year and 2.6% from the previous month in January 2023.
According to Redfin, home prices in Los Angeles were down 3.9% in February 2023 compared to last year. Homes sell for a median price of $913K, according to Redfin. Zillow has the average home price in Los Angeles at $891,820.
According to Realtor, the median listing price as of February 2023 in Los Angeles was $1.1M, with a median listing home price per square foot of $671. The median sold price listed by Realtor was $964.9k. According to Realtor’s data in early 2023, Los Angeles is a seller's market, with more people looking to buy homes than homes available.
Los Angeles is the second-largest city in the United States, with over 3.8 million people. The city is known for its diverse mix of people from different cultures and backgrounds.
View detailed demographics of Los Angeles citywide population in 2021 from City of Los Angele’s Department of City Planning’s Citywide demographic profile report.
According to DataUSA, the largest ethnic groups in Los Angeles, CA are:
“White (Non-Hispanic) (28.5%)
Other (Hispanic) (22.2%)
White (Hispanic) (20.4%)
Asian (Non-Hispanic) (11.6%)
Black or African American (Non-Hispanic) (8.43%)”
81.4% of the residents in Los Angeles, CA are U.S. citizens. The rate of citizenship has been increasing year-on-year but is still considerably lower than the national average of 93.4%.
Below are two following infographics from DataUSA illustrating the breakdown of different occupations and employment by industries in Los Angeles.
In terms of employment, LA is home to a number of industries, including entertainment, technology, and healthcare. The city has a strong job market, with an unemployment rate of 4.2% as of January 2022.
The largest universities in Los Angeles are the University of Southern California, the University of California-Los Angeles, and California State University-Northridge.
The median household income in Los Angeles in 2021 was $69,778, according to U.S. Census Bureau.
According to SoFi, the median income for an individual in Los Angeles is $62,142, with a median age of 35.9. 34.4% of the Los Angeles population is college educated, and 41.3% are married. See how these demographics compare to the city of San Francisco.
Investing in a second home for rental income can be a profitable or potentially lucrative financial decision, as it provides a steady stream of passive income. This is particularly true in Los Angeles, where the demand for housing is high. By renting out a second property, homeowners can earn additional income to supplement their primary source of income.
Managing a rental property can be challenging, so using a property management company like Doorstead can be a valuable option. With their guaranteed rent income and other value-added services, Doorstead can help homeowners maximize their rental income while minimizing the amount of time and effort they have to spend managing their property.
The amount of income you can make from a rental property depends on a number of factors, such as the location, size, and condition of the property. However, this figure can vary depending on the specific neighborhood and type of property. If you own a specific property in Los Angeles, enter your address below, and Doorstead can help you estimate the expected rental price.
Managing a rental property can be a daunting task, especially if you have no prior experience in property management. This is where a property management company like Doorstead comes in, with guaranteed rent income and other value-added services.
Learn about rental property and rental apartment management in Los Angeles with our guide to LA property management.
Managing a rental property can be time-consuming and challenging. This is where Doorstead comes in, with their value-added property management services. Doorstead is a property management company that offers guaranteed rent income to homeowners. This means homeowners can be assured of a steady income stream, even if their property is vacant. Learn more about our rent guarantee, and see how our customers use it to passively profit from their out-of-state property.
Doorstead also offers a range of other services, including property maintenance, tenant screening, and marketing. By outsourcing these tasks to Doorstead, homeowners can save time and focus on other things, such as their primary job or family. Read some customer testimonials about Doorstead’s peace-of-mind property management.
The Los Angeles rental market forecast for 2023 points to a continued increase in rental rates, increased demand for rental properties, and a slight decline in vacancy rates. Homeowners and renters should carefully monitor neighborhood trends to make informed decisions when investing in or renting properties. By staying informed about the latest data and insights, you'll be better equipped to navigate the dynamic and ever-changing landscape of the Los Angeles rental market.
Interested in other competing markets? Read about San Francisco’s 2023 housing demographics and Boston’s housing market demographics for a comparison of these cities and opportunities.
Get your property rent-ready with this essential checklist, delivered straight to your inbox.
By providing your email address, you are agreeing to receive marketing communications from Doorstead.