Los Angeles Real Estate Forecast: What to Expect in 2025–2026
- Strategic Growth
- Sep 4
- 3 min read
At Strategic Growth, we know how important it is for both landlords and tenants to understand where the Los Angeles housing market is headed. As we move through 2025, the market is showing signs of balance after years of ups and downs. Here’s what you can expect for the rest of 2025 and into 2026.
The Market Is Cooling, But Staying Strong
Los Angeles home prices are taking a small pause. Forecasts show they could dip by about 0.2% by the end of 2025. This is not a crash just the market slowing down after years of fast growth.
For landlords: Property values are holding steady, which keeps your investment secure.
For tenants: Slower growth means fewer sudden rent spikes.
Prices Expected to Rise Again in 2026
Experts predict a small rebound of about 0.4% in early 2026. That may not sound big, but it shows the market’s strength. The California Association of Realtors also expects home prices across the state to rise by around 4% in 2025, thanks to lower mortgage rates and more housing being built.
This points to long-term confidence in Los Angeles real estate.
Rentals Remain in High Demand
The rental market is still very strong:
Occupancy rates are close to 95%.
The average monthly rent is about $2,700.
In-demand neighborhoods like Silver Lake and Glendale are bringing in 6–7% returns for investors.
For renters, this means competition for good housing stays high. For landlords, well-maintained properties will continue to rent quickly.
Wildfires Are Tightening Supply
The January 2025 wildfires destroyed or damaged more than 15,000 homes across Southern California. This has made the rental shortage even worse. Many families displaced by the fires faced rent increases of 15–20%, even with local rent caps in place.
It could take 2–3 years to rebuild, which means tight rental supply and high demand will likely continue.
What’s Driving the Market?
Several factors are shaping what we see today:
Not Enough Housing – California still needs much more housing to meet demand.
High Mortgage Rates – Buying is harder, so more people are renting.
New Laws – Transit-oriented housing bills may help with affordability, but change takes time.
Tenant Preferences – Renters now look for pet-friendly, tech-ready, and wellness-focused homes.
What This Means for You
For landlords: Focus on keeping good tenants, upgrading your property, and staying ahead of local rules. Demand is steady your rental can remain a strong investment.
For tenants: Prices are stabilizing. While rents are still high, sudden jumps are less likely. Planning ahead will help you secure the right home.
At Strategic Growth, we’re here to support landlords and tenants through these shifts. From property management to tenant support, our goal is to create value and peace of mind for everyone.
