The Los Angeles housing market is a pivotal component of the California real estate landscape, showcasing its own unique trends and dynamics. This analysis is based on the data provided by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) report for August 2023, allowing us to examine the current state of the market and provide insights into its forecast.
Current Market Snapshot
In August 2023, the median sold price of existing single-family homes in Los Angeles County was $882,020, representing a 3.6% increase from the previous month (July 2023) and a 3.2% increase from the same month last year (August 2022). On the other hand, the sales in the same period showed a 5.6% decrease compared to the sales of August 2022, indicating a dip in sales activity.
Market Trends
The Los Angeles housing market has seen a consistent upward trajectory in median sold prices, both on a month-to-month and year-over-year basis. This suggests a resilient market with sustained demand and a competitive landscape, potentially fueled by a combination of factors such as economic growth, employment opportunities, and lifestyle preferences.
Despite the price growth, the market is experiencing a decline in sales compared to the previous year, aligning with the broader trend observed in the Southern California region. This decline in sales could be attributed to various factors, including rising mortgage rates and affordability challenges, which may deter potential buyers.
Housing Supply
Generally, a balanced market will lie somewhere between four and six months of supply. Inventory is calculated monthly by taking a count of the number of active listings and pending sales on the last day of the month. If an inventory is rising, there is less pressure for home prices to increase. With 2.5 months of supply left, it is still short of what economists say is needed for a balanced market. Hence, the Los Angeles County housing market will continue to see upward pressure on home prices.
- Months Supply of Inventory (SFH) for Los Angeles County is now 2.4 months.
- Months Supply of Inventory (SFH) for the Los Angeles Metro Area is 2.4 months.
- Months Supply of Inventory (SFH) for Southern California is 2.3 months.
Market Forecast
Looking ahead, the market is projected to maintain its upward trajectory in terms of prices, albeit at a slightly moderated pace. Factors such as economic stability, government policies, and interest rates will significantly influence this trajectory. It is important for buyers and sellers to closely monitor these factors and adjust their strategies accordingly.
Considering the competitive nature of the market, buyers should act judiciously and be prepared for potential bidding wars. Additionally, it is advisable for sellers to price their properties competitively to attract potential buyers.
Is it a Good Time to Buy in Los Angeles?
The question of whether it's a good time to buy in Los Angeles depends on various factors, including your financial situation, long-term goals, and risk tolerance. While prices are on the rise, they may continue to appreciate, making a purchase a potentially valuable investment. However, considering the competitive nature of the market, buyers should conduct thorough research, be financially prepared, and consider consulting with real estate professionals for guidance.
Hence, the Los Angeles housing market showcases consistent price growth, indicating a robust demand for housing in the region. However, buyers and sellers should remain informed about market dynamics and exercise caution in their real estate transactions.
Is Los Angeles a Seller's Real Estate Market?
The following Los Angeles housing market trends are based on single-family, condo, and townhome properties listed for sale on realtor.com. Land, multi-unit, and other property types are excluded. This data is provided as an informational resource only.
When it comes to the real estate market, one crucial factor to consider is whether it favors sellers or buyers. A seller's market indicates that there is more demand from buyers than the available supply of homes. Let's explore whether Los Angeles County, CA qualifies as a seller's real estate market based on data for Aug 2023.
Market Prices and Trends
In August 2023, the median listing home price in Los Angeles County stood at $987.5K, showcasing a significant 11.2% year-over-year increase. The median listing home price per square foot was $629, indicating the price efficiency in the market.
Moreover, the median home sold price was $860K, emphasizing a strong pricing trend in the county.
Sale-to-List Price Ratio
The sale-to-list price ratio is a crucial indicator of market competitiveness. In August 2023, homes in Los Angeles County, CA, were sold for approximately 100.05% of the asking price on average. This high ratio suggests a market where sellers have the upper hand.
Days on Market
On average, homes in Los Angeles County remained on the market for 42 days before being sold. Although this figure indicates a reasonable pace of sales, it's important to note that the trend for median days on the market has slightly increased since the previous month.
Market Dynamics
The data strongly suggests that Los Angeles County, CA is a seller's market in August 2023. The demand for homes outweighs the available supply, resulting in a situation where sellers have the advantage. This is reflected in the sale-to-list price ratio, where homes are fetching close to their asking prices.
Interestingly, Los Angeles County comprises 218 cities with varying median listing home prices. The range, from the most affordable city, Hi Vista, with a median listing home price of $422.5K, to the most expensive city, Beverly Hills, with a median listing home price of $6.6M, underlines the diverse housing landscape within the county.
In conclusion, prospective buyers in Los Angeles County need to be prepared for a competitive market. Strategic decisions, expert guidance, and financial readiness are key components to navigate this seller's real estate market effectively.
Is Rent Going Down in Los Angeles?
The Zumper Los Angeles Metro Area Report analyzed active listings across the metro cities to show the most and least expensive cities and cities with the fastest growing rents. Rents in Los Angeles are higher than the state median rent. The California one bedroom median rent was $2,075 last month. Beverly Hills was the most expensive city with one-bedrooms priced at $3,360 while Yucca Valley was the most affordable city with one bedrooms priced at $1,000.
The Fastest Growing Cities in the Los Angeles Metro Area For Rents (Y/Y%)
- Oxnard had the fastest growing rent, up 22.2% since this time last year.
- Beverly Hills saw rent climb 20.9%, making it the second fastest growing.
- Orange ranked as third with rent jumping 17.9%.
The Fastest Growing Cities in Los Angeles Metro Area For Rents (M/M%)
- Oxnard had the largest monthly rental growth rate, up 6.1%.
- Torrance rent increased 5.5% last month, making it second.
- Riverside was third with rent climbing 4% last month.

Los Angeles Housing Market Forecast 2023-2024
Let us look at the price growth recorded by Zillow, a leading real estate marketplace. The Los Angeles housing market has long been a topic of interest due to its dynamic nature and diverse neighborhoods. For those keen on understanding the trajectory of the Los Angeles housing market, Zillow provides valuable insights based on comprehensive data analysis. Let's explore the current situation and the forecasted outlook for the housing market in Los Angeles.
Current Market Snapshot
As of August 31, 2023, the average home value in the Los Angeles-Long Beach-Anaheim area stands at $891,328. Over the past year, there has been a slight dip of 1.4% in home values. Homes in this region typically go to pending in around 13 days, indicating a relatively fast-paced market.
Market Forecast
Looking ahead, Zillow's 1-year market forecast predicts a 4.0% increase in home values by August 31, 2024. This forecast suggests a positive trajectory, anticipating a rebound from the recent dip in home values.
Sale Dynamics
Examining sale dynamics, the median sale to list ratio as of July 31, 2023, was 1.006, indicating that homes were typically sold slightly above the listed prices. Additionally, a significant 57.2% of sales were transacted over the list price, illustrating the competitive nature of the housing market.
Time on Market
The median days to pending, as of August 31, 2023, was 13 days. This indicates that homes are moving swiftly, underlining the demand in the market and the willingness of buyers to act promptly.
Market Outlook: Are House Prices Going Up?
Considering the 1-year market forecast, which predicts a 4.0% increase in home values, the housing market in Los Angeles is showing signs of recovery and growth. While there has been a slight dip in home values over the past year, the forecast suggests a positive shift in the coming year, with prices expected to rise. This anticipated rise in home values points towards a favorable outlook for prospective sellers and a potentially competitive market for buyers.
In summary, the housing market in Los Angeles is poised for growth, and the current forecast indicates an upward trend in home values. Prospective buyers and sellers should stay informed and work closely with real estate professionals to make informed decisions in this evolving market.

Is Los Angeles Housing Market Going to Crash?
Some of housing analysts say that home prices in Los Angeles and Orange counties will fall by the middle single digits in 2023, while home prices in the Inland Empire will fall by the high single digits over the same time period. They anticipate that prices will continue to fall on a regional and national scale in 2024 but at a considerably slower rate, followed by a little increase in 2025.
Do buyers have any advantage? Is it the right time to buy a house in Los Angles? This is a never-ending question with no definitive answer. Buyers believe it is not a very good time to buy a home in Los Angeles due to rising mortgage rates and home prices. On the other hand, it is a good time to sell so you can expect more inventory due to increasing seller optimism.
More houses are expected to be listed in the coming months which may bring down the pace of appreciation to some extent. Affordability is a big issue in Los Angeles County as nearly three in four residents can’t afford to buy a median-priced home in the area. According to HousingWire, an index that combined median income and median home prices made Los Angeles the least affordable city in the country, and several younger residents said they were concerned they will never be able to afford a house. Home shoppers are leaving Los Angeles for cheaper metros, the most popular being Las Vegas.
Is Real Estate a Good Investment in Los Angeles?
Should you consider Los Angeles real estate investment? Many real estate investors have asked themselves if buying a property in Los Angeles is a good investment. You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers.
Los Angeles is a moderately walkable city in Los Angeles County. It is home to around four million people. It is the largest city in California and the second-largest in the United States. Los Angeles Metropolitan Area is a 5- region that includes Los Angeles, Orange, Riverside, San Bernardino, and Ventura. The L.A. metropolitan area with over 13 million people rivals New York in population as the largest in the country. However, being a huge real estate market is not reason enough to invest here.
The Los Angeles real estate market is considered one of the premier markets for both investors and homeowners. It is also touted as the nation’s least affordable housing market. If you look in the long-term, it’s always a good investment to buy in Los Angeles. It is said that you will always get your money back or you would make a profit, as Los Angeles has a track record of being a great long-term investment.
How do I Invest in Real Estate in Los Angeles?
According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom large apartment complexes are the most common housing units in Los Angeles. Other types of housing that are prevalent in Los Angeles include single-family detached homes, duplexes, rowhouses, and homes converted to apartments.
Single-family homes account for about 40% of Los Angeles' housing units. In April 2020, the single-family homes posted their biggest percentage gains of the year so far in the Los Angeles metro area. House prices increased by 4.9% in Los Angeles County, 3.7% in Orange County, and 5% in the Inland Empire.
The Los Angeles housing market has been hot for years. In 2018, home prices in Los Angeles reached record heights, climbing to levels far above those recorded in the years leading up to the Great Recession. If we check historical data, in Los Angeles and Orange counties, year-over-year price increases peaked at 8.2% in April 2018 and have declined every month since. In October 2018, home prices in Los Angeles and Orange counties rose 5.5% over the previous year, according to the latest available data from the closely watched S&P CoreLogic Case-Shiller index.
A big factor, according to experts, is that many would-be buyers are increasingly priced out. But real estate agents also say a growing number of people who could buy, like Saavedra, have decided they don’t want to pull the trigger at the top. Home values in Los Angeles are up less than 3 percent since last year. After years of steady escalation, home prices in Los Angeles County are tapering off, according to a new report from CoreLogic.
They find that Los Angeles county’s median home price was $579,500 in January, down slightly from December’s median price of $581,500. That’s a 2.6 percent increase over the same time last year. By this comparison, prices shot up nearly 8 percent between January 2017 and January 2018. Prices continued to rise through much of 2018 but began to drop heading into Q4 2018. In Q4 2019, home prices were still slightly higher than a year earlier, but the spread has narrowed.
2018’s FRM interest rate increase decreased the principal amount homebuyers can borrow while making the same sustainable mortgage payment. The National Association of Home Builders and Wells Fargo Housing Opportunity Index have given the title of least affordable housing market to Los Angeles. In Los Angeles-Long Beach-Glendale region, only 11.3% of homes sold during the fourth quarter of 2019 were affordable to families earning the area’s median income of $73,100.
The 2020 pandemic had its impact on the market bringing down the rent prices while houisng prices reached record highs. Los Angeles real estate market isn’t the most affordable in the country, but it’s a market with ample investment opportunities for those who can afford the median price of over 700K.
However, this number doesn't apply to every part of the Los Angeles real estate market. There are some neighborhoods where prices are much cheaper and completion between buyers is much lesser. The high rate of appreciation has not prevented real estate investors from realizing a great return on investment. Instead of flipping rehabs, you should consider investing in rental properties.
Let’s find some factors that make LA a good place to invest for wealthy investors. We’ll address the biggest factor pulling people to the Los Angeles housing market next. In this section, we're not taking into account the short-term impact of the pandemic on the economy and housing market.
Los Angeles Hidden Real Estate Deals
Distressed sellers exist in every real estate market. If you do find an ideal property in the Los Angeles housing market, the increased selection of properties means you’re far less likely to end up in a bidding war. If you’re looking for other great deals, check out Vermont Vista, Hyde Park, Wilmington, and Cypress Park, where the asking prices are below the Los Angeles median price. In December 2020, the median list price of homes in Vermont Vista was $580K while the median sale price was $566K.
Foreclosures can be a great way to snap up Los Angeles real estate at a bargain price. Foreclosure rates, though, vary wildly. Note that for every home in foreclosure with the bank, there is probably another that is approaching that point and would be sold at a discount by a distressed seller who wants to avoid foreclosure. In distressed neighborhoods, fix and flip may be an option. So is buying Los Angeles real estate cheap and renting it out in a market starving for affordable rental units?
Single-Family Rental vs Multi-Family Investment
Years of appreciation have led Los Angeles real estate investors to favor rentals over flipping. This market favors rental property owners. In the city of Los Angeles alone, renters live in more than 600,000 apartments spread across 118,000 properties, according to the city’s Housing and Community Investment Department. In late 2019, California became the second state (after Oregon) to pass a statewide rent control law. It covers all multi-family rental units built more than 15 years ago. The state law applies on top of any stricter local ordinances.
Therefore, rent control applies to Los Angeles rental properties if they are multi-family units. Single-family detached homes rarely fall under rent control ordinances. They are generally not subject to LA Rent Control. The only exception is when two or more dwelling units are located on the same lot; then rent control rules are likely to apply. The simplest solution to this is to only buy single-family Los Angeles rental properties. Never buy a property with a separately rented granny flat or upstairs apartment you could rent out, as well.
On the other hand, homeownership rates in California have been declining for years. The sea change has been the growth of renting among the middle and upper classes. For example, a third of Los Angeles residents with incomes over $100,000 rent instead of own. Baby Boomers downsizing their homes choose to rent condos and homes that others maintain. Millennials who have a good income often say their parents lose their homes in the Great Recession and choose to rent instead.
This is driving demand for the luxury Los Angeles real estate market, whether condos, apartments with concierges, or luxury homes rented instead of purchased so that the resident can easily move if they lose their jobs. Only San Jose and San Francisco have more high-income residents that rent than the Los Angeles real estate market. Although apartment prices are high and rising, they’re lower in Los Angeles than in California.
That’s one bright spot in an otherwise tough rental market for Los Angeles renters. The Military also adds renters to the Los Angeles housing market. Any military base will pump renters into a real estate market. The Los Angeles real estate market is simply notable for having a large military population but a job market so diverse that the closing of a base won’t hurt the area’s home prices overall.
The Los Angeles AirPort Base, Edwards Air Force Base, and smaller facilities dump many renters into the Los Angeles housing market. Those with families often choose to rent Los Angeles rental properties instead of life on base. On top of that are defense contractors like Raytheon in Long Beach and El Segundo who pay people a premium to live here.
Los Angeles Rental Market Trends 2023
Current Rent Prices in Los Angels: Before the pandemic, the average rent for an apartment in Los Angeles was $2,524, growing by 2% YTY, according to RENTCafé. The average size for a Los Angeles, CA apartment is 792 square feet. 40% of the households in LA are renter-occupied while 60% are owner-occupied. Studio apartments are the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.
As of September 2023, the average rent for a 1-bedroom apartment in Los Angeles, CA is currently $2,400. This is a 3% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Los Angeles increased by 1% to $1,825. The average rent for a 1-bedroom apartment decreased by -1% to $2,400, and the average rent for a 2-bedroom apartment remained flat.
- The average rent for a 2-bedroom apartment in Los Angeles, CA is currently $3,400. This is a 2% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Los Angeles, CA is currently $4,952. This is an 8% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Los Angeles, CA is currently $7,200. This is a 1% increase compared to the previous year.
Some of the most affordable neighborhoods in LA are:
- Jefferson Park, where the average rent goes for $1,355/month.
- El Sereno, where renters pay $1,396/mo on average.
- Vermont Knolls, where the average rent goes for $1,445/mo.
- Glassell Park & Cypress Park, where the average rent goes for $1,485/month.
- Cypress Park, where renters pay $1,396/mo on average.
- North Hills, where renters pay $1,530/mo on average.
Construction Isn’t Meeting Housing Demand in LA
The Los Angeles housing market has seen a bump in residential construction. This has helped to satisfy some demand from renters. However, due to increasing demand, the new supply hasn’t brought prices down. The current supply of existing single-family homes is 1.4 which is insufficient to meet the demand. This also suggests that any new wave of construction will at most result in rental rates remaining steady instead of causing them to fall.
The geography of this region also limits the supply. The Los Angeles metropolitan area is perched between the ocean and the mountains. You obviously can’t build on water. There’s only so far you can build into the hills when mudslides and earthquakes limit how much you can build there. The Los Angeles real estate market is further constrained by the vast national parks around L.A. like the Angeles National Forest. These areas simply cannot be turned into residential areas.
Two of the most fundamental economic indicators are employment and income. Home sales usually are directly tied to an economy's health and rise and fall with economic activity. As economies slow, the supply of money tends to become more restrictive. What makes Los Angeles unique is the employment market. Want to work in Hollywood? Move to L.A. Want to work for a production company or in fashion? Come to L.A. If rent is too high, share an apartment or single-family home with friends. In terms of home prices, income, and employment indicate whether people can afford current and future increases.
The Golden State added 310,300 jobs in 2019, a 1.8% increase, to a total of 17.61 million, according to data released by the California Employment Development Department. The previous year’s increase was 1.6%. In Los Angeles County, nonfarm jobs grew by 67,800 to a total of 4.65 million. That was a 1.5% rise, led by healthcare and social assistance (up 28,000) and construction (up 8,500). The unemployment rate was 4.4% in December, down from 4.7% a year earlier.
Note that due to the ongoing pandemic, Los Angeles County’s unemployment rate has increased. It fell to 11% in November from a revised 12% in October amid seasonal hiring gains in retail and logistics, according to the State Employment Development Department. It was 19.6 percent in April 2020. Every major sector of the county’s economy suffered significant job losses during the past 12 months, led by accommodation/food services, which shed 120,000 payroll jobs.
How to Invest in Real Estate in Los Angeles?
In any property investment, cash flow is gold. California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. The Los Angeles real estate market has many points in its favor beyond its sheer size. The strong market fundamentals make the Los Angeles housing market a good place to invest if you’re looking at buying real estate in California.
How good is it to buy a Los Angeles investment property? Not every real estate investor wants to enter the most expensive and competitive Los Angeles real estate market. For buyers, the affordability is dropping and only 30% of LA county residents own a home. Home Prices are so high and out of reach for many buyers – many consider LA homes grossly over-priced.
While Los Angeles home prices may be increasing slightly over the next year, the fact remains that there are many homes available at fair prices. Growing household formations, ongoing job creation, and rising wage growth are fueling housing demand,” said NAHB Chief Economist Robert Dietz. “But a record-low resale inventory, coupled with underbuilding as builders deal with supply-side constraints, continue to put upward pressure on home prices even as interest rates remain at low levels.”
There’s still a strong opportunity for rental property investment in Los Angeles. There is a strong and continuous demand for apartments for rent in LA. This is fueled by always tight inventory, severe competition from tenants, rising wages, and a good economy. Therefore, for a great opportunity for rental income for investors. Good cash flow from Los Angeles investment properties means the investment is, needless to say, profitable.
A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Los Angeles real estate investment opportunity would be key to your success. If you invest wisely in Los Angeles real estate, you could secure your future. The best investment is now looking for a rental property that will generate good cash flow. Your best tenants would be the retirees who intend to relocate to Los Angeles and want to purchase property to rent out.
The running costs for owning and managing a Los Angeles rental property should not be high. While hiring a property management company you should expect to give up roughly ten percent of the rent for each property they manage. Remember to factor this loss into your calculations when budgeting for a new rental property. The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand.
There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Los Angeles investment property and you should be able to get a good return on your investment over the long term. The neighborhoods in Los Angeles must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls.
A cheaper neighborhood in Los Angeles might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. Los Angeles real estate prices are well above average cost compared to national prices. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplexes and triplexes in Class A neighborhoods. The inventory is low, but opportunities are there.
If you think of investing in LA, you have decided on a long-term investment property. Here are the ten neighborhoods in LA having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
- W 21st St / S Orange Dr
- Irvington Pl / N Ave 51
- Montecito Heights Northeast
- N Ave 57 / Monte Vista St
- Happy Valley
- N Ave 52 / Granada St
- Highland Park
- Harvard Heights Southwest
- Highland Park North
- Apple St / S Dunsmuir Ave
As with any real estate purchase, act wisely. Evaluate the specifics of the Los Angeles housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Los Angeles.
This article shouldn't be used to make real estate or financial decisions. Some of this article's information came from referenced websites. Norada Real Estate Investments provides no express or implied claims, warranties, or guarantees that the material is accurate, reliable, or current. All information should be validated using the below references. Norada Real Estate Investments does not predict the future US housing market. This article educated investors about LA real estate. Buying a rental property needs research, planning, and budgeting. Not all investments are good. Always do research and consult a real estate investment counselor.
REFERENCES
Market Data, Reports & Forecasts
https://www.car.org/marketdata/data/countysalesactivity
https://www.car.org/en/marketdata/interactive/housingmarketoverview
https://www.zillow.com/losangeles-ca/home-values
https://www.redfin.com/city/11203/CA/Los-Angeles/housing-market
https://www.realtor.com/realestateandhomes-search/Los-Angeles_CA/overview
https://www.zumper.com/rent-research/los-angeles-ca
https://www.zumper.com/blog/los-angeles-metro-report/
https://www.littlebighomes.com/real-estate-los-angeles.html
Covid-19 Impact/News
https://la.curbed.com/2020/2/28/21157988/home-prices-los-angeles-report
https://www.latimes.com/homeless-housing/story/2020-07-23/southern-california-home-prices
Best Neighborhoods and Statistics
https://www.zillow.com/
https://en.wikipedia.org/
https://www.neighborhoodscout.com/ca/los-angeles/real-estate/
https://www.mashvisor.com/blog/invest-los-angeles-real-estate-market-2019/
LA demographics
http://worldpopulationreview.com/us-cities/los-angeles-population
Rent control
https://www.latimes.com/archives/la-xpm-2007-dec-30-re-aptlife30-story.html
Foreclosures
https://www.realtytrac.com/statsandtrends/foreclosuretrends/ca/los-angeles-county
Rental market/Apartments
https://la.curbed.com/2019/2/4/18210857/los-angeles-rental-prices-2019-average
https://www.rentcafe.com/average-rent-market-trends/us/ca/los-angeles
https://la.curbed.com/2019/2/26/18241819/rent-vs-buy-los-angeles-high-income
Job & Unemployment Stats
https://fred.stlouisfed.org/series/CALOSA7URN
https://www.labormarketinfo.edd.ca.gov/file/month/la$pds.pdf
Military market
http://www.laalmanac.com/military/mi05.php
https://militarybases.com/california
Good time to buy/price predictions
https://la.curbed.com/2018/12/7/18128000/los-angeles-real-estate-market-prediction-2019
https://www.forbes.com/sites/ellenparis/2019/02/23/buyers-should-revisit-los-angeles-and-san-francisco-housing-markets-for-new-opportunities/#47bd1029428c