Los Angeles Real Estate Market Analysis

Real Estate Investments in Los Angeles

Discover Los Angeles

The coastal Southern California City of Los Angeles is better known by its initials, LA. With over 4 million residents, Los Angeles is the biggest city in California in regards to population and the second in the nation, after New York City. While the Los Angeles real estate market typically enjoys positive population growth, it doesn’t surpass the national growth rate. This can likely be attributed to the negative net migration that Los Angeles has been experiencing for the past 5 years.

It’s believed that a high cost of living and a lack of affordable housing in the Los Angeles housing market is the cause of the negative net migration. However, for a Los Angeles real estate investor who can afford to buy and own rental properties in the city, there is high rental demand. According to NeighborhoodScout, around 64% of LA residents are tenants, which means that buying a rental property in Los Angeles makes for a good real estate investment.

The economy is surprisingly not hindered by the slow population growth in Los Angeles. The job market continues to grow at a rate higher than the national. Even though Los Angeles is famous for being home to Hollywood and has been dubbed the Entertainment Capital of the World, its economy goes far beyond the entertainment industry. The city is actually part of the largest manufacturing center in the United States with over 300,000 manufacturing jobs in the Los Angeles-Glendale-Long Beach metro area. Other key industries in LA include banking and financing, healthcare, high-tech research and development, education, architecture, engineering, and both commercial and residential real estate construction.

The Los Angeles real estate market was named one of the Top 20 Markets to Watch in 2019 by the annual PWC real estate report. In the Pacific Region of the US, specifically, it comes in only second to Seattle in terms of overall real estate prospects.

Los Angeles Real Estate Investment Performance

Facts and Market Trends in Los Angeles

Homes For Sale3,229

Airbnb Properties6,294

Rental Properties12,037

Traditional Vacancy rate3.80%

Airbnb Occupancy Rate62.57%

Mashmeter38.89%

Median Price$1,100,000

Median Rent Price$5,580

Price/sqft$1,971

Median Days on Market81

Price to Rent Ratio33.3

Average Cap Rate

Airbnb5.66%

Traditional4.12%

Average Rental Income

Airbnb$5,514

Traditional$3,840

Median Household Income$77,456

Population3,849,000

Transportation in Los Angeles

69 / 100

Somewhat Walkable

53 / 100

Good Transit

59 / 100

Bikeable

Best Short Term Rental Markets

Find great vacation rentals for sale in the top performing markets

Short Term Rentals For Sale

Calculate annual revenue, ADR, & occupancy rates with our free Airbnb calculator

Short Term Rental Calculator

Los Angeles Rent Prices

RENTAL STRATEGY	STUDIOS	1 BEDROOM	2 BEDROOMS	3 BEDROOMS	4 BEDROOMS
Airbnb	$2,857	$3,117	$4,633	$6,244	$7,466
Traditional	$1,887	$2,236	$3,400	$4,641	$6,076

Los Angeles, CA - Homes for Sale - Newly Listed

Find Investment Properties

$640,000

MLS SB23187538

15420 Bonsallo Avenue
Los Angeles, CA 90247 Harbor Gateway

Single Family Residential

3 beds2 baths1,166 sq.ft.

CAP RATE

Trad. 4.44%Airbnb 4.74%

$998,000

MLS DW23187158

523 N Oleander Drive
Los Angeles, CA 90042 Highland Park

Single Family Residential

3 beds3 baths1,798 sq.ft.

CAP RATE

Trad. 3.34%Airbnb 3.64%

$565,000

MLS 23-318951

442 W 87th Pl
Los Angeles, CA 90003 Southeast Los Angeles

Single Family Residential

2 beds1 baths780 sq.ft.

CAP RATE

Trad. 2.98%Airbnb 4.22%

$989,000

MLS 23-318675

3442 Hollydale Dr
Los Angeles, CA 90039 Atwater Village

Single Family Residential

2 beds1 baths768 sq.ft.

CAP RATE

Trad. 3.00%Airbnb 3.19%

Top Performing Los Angeles Properties

Find Investment Properties

$620,000

MLS WS23070057

134 S Clarence Street
Los Angeles, CA 90033 Aliso Village

Single Family Residential

4 beds1 baths1,118 sq.ft.

CAP RATE

Trad. 3.96%Airbnb 7.98%

$585,000

MLS SB23184803

1669 E 112th Street
Los Angeles, CA 90059 Watts

Single Family Residential

4 beds2 baths1,178 sq.ft.

CAP RATE

Trad. 4.43%Airbnb 7.89%

$585,000

MLS 23-305541

1156 E 65th St
Los Angeles, CA 90001 Southeast Los Angeles

Single Family Residential

4 beds2 baths1,161 sq.ft.

CAP RATE

Trad. 3.89%Airbnb 7.89%

$659,000

MLS 23-300285

360 S Kenmore Ave #302
Los Angeles, CA 90020 Koreatown

Condo/Coop

3 beds3 baths1,331 sq.ft.

CAP RATE

Trad. 4.28%Airbnb 7.87%

Recently Sold Homes in Los Angeles, CA

Find Investment Properties

$1,565,000

MLS 23-299041

1138 S Mariposa Ave
Los Angeles, CA 90006 Harvard Heights

Multi Family

8 beds0 baths0 sq.ft.

CAP RATE

Trad. -0.43%Airbnb N/A

$1,139,500

MLS RS23058789

459 N Rowan Avenue
Los Angeles, CA 90063 Boyle Heights

Multi Family

4 beds baths2,735 sq.ft.

CAP RATE

Trad. 4.55%Airbnb N/A

$1,500,000

MLS DW23139962

5210 Oakland Street
Los Angeles, CA 90032 Westchester

Multi Family

7 beds baths2,836 sq.ft.

CAP RATE

Trad. 0.94%Airbnb N/A

$1,350,000

MLS 23-318039

220 S Bonnie Brae St
Los Angeles, CA 90057 Westlake

Multi Family

10 beds0 baths0 sq.ft.

CAP RATE

Trad. -0.10%Airbnb N/A

Property Value Changes and Real Estate Appreciation in the Los Angeles Housing Market

With the high real estate prices in Los Angeles, it’s natural to see that property appreciation has been significant over the years. According to NeighborhoodScout, Los Angeles properties have experienced a total appreciation of 200.8% since Q1 2000, which is an annual average rate of 6.1%. Typically, housing markets with such high property prices tend to show minimum appreciation once they hit peaks. However, Zillow reports that Los Angeles real estate values appreciated by 4.5% in 2018. So a property investor who can afford to buy an investment property in LA will still enjoy appreciation.

The Los Angeles housing market is currently a buyer’s market as there are more homes for sale on the market than people looking to buy. This is forcing property sellers to negotiate, which accounts for the fact that the median price of properties that sold is far below the median listing price. This fact, along with the property appreciation, makes the Los Angeles real estate market a great place to buy investment properties to rent out if you can afford the price tag.

Los Angeles, CA Top Multi Family Homes

Find Investment Properties

$799,999

MLS BB23158695

2421 S Cloverdale Avenue
Los Angeles, CA 90016 Mid City

Multi Family

4 beds3 baths1,916 sq.ft.

CAP RATE

Trad. 4.77%Airbnb 4.92%

$1,450,000

MLS 23-315645

3756 4th Ave
Los Angeles, CA 90018 Leimert Park

Multi Family

5 beds0 baths0 sq.ft.

CAP RATE

Trad. 2.38%Airbnb 1.89%

$950,000

MLS P1-13461

10007 San Pedro Street
Los Angeles, CA 90003 Southeast Los Angeles

Multi Family

0 beds0 baths0 sq.ft.

CAP RATE

Trad. 7.56%Airbnb N/A

$1,800,000

MLS SR23159648

1231 W 8th Street
Los Angeles, CA 90017 Pico-Union

Multi Family

beds baths7,143 sq.ft.

CAP RATE

Trad. 7.39%Airbnb N/A

Homes Below Median Price in the Los Angeles, CA Real Estate Market

Find Investment Properties

$620,000

MLS WS23070057

134 S Clarence Street
Los Angeles, CA 90033 Aliso Village

Single Family Residential

4 beds1 baths1,118 sq.ft.

CAP RATE

Trad. 3.96%Airbnb 7.98%

$585,000

MLS SB23184803

1669 E 112th Street
Los Angeles, CA 90059 Watts

Single Family Residential

4 beds2 baths1,178 sq.ft.

CAP RATE

Trad. 4.43%Airbnb 7.89%

$585,000

MLS 23-305541

1156 E 65th St
Los Angeles, CA 90001 Southeast Los Angeles

Single Family Residential

4 beds2 baths1,161 sq.ft.

CAP RATE

Trad. 3.89%Airbnb 7.89%

$659,000

MLS 23-300285

360 S Kenmore Ave #302
Los Angeles, CA 90020 Koreatown

Condo/Coop

3 beds3 baths1,331 sq.ft.

CAP RATE

Trad. 4.28%Airbnb 7.87%

Los Angeles Airbnb Growth and Regulations

Opponents of Airbnb in Los Angeles blame the lack of affordable housing and high real estate prices on the growth of the short-term rental industry. With Los Angeles County welcoming 2.7 million guests in 2018, generating $613 million in income for Airbnb Los Angeles hosts, the City Council set out to regulate these rental properties. As of July 2019, non-owner occupied short-term rental properties will be prohibited from being rented out on Airbnb and other vacation rental websites. This means that the operation of Airbnb investment properties is illegal in the Los Angeles real estate market.

For a primary residence to operate within the law, the host must live in the Airbnb rental property for half of the year. Short-term rentals will only be allowed to host guests for up to 120 days a year. Airbnb rentals will be subject to the same hotel accommodation taxes present in LA. Airbnb Los Angeles hosts must register with the city to operate legally at a cost of $89 a year and the rental property must meet all rental safety requirements. Properties under rent stabilization or ones that are considered affordable housing may not be listed for rent on Airbnb.