The Los Angeles apartment market has already returned to pre-pandemic activity, according to the latest research from Marcus & Millichap. Apartment leasing is at a 15-year high, illustrating the strong renter demand. Demand has been so healthy that vacancy has fallen to 4% and rents are up 3% for the year.

Job growth is behind the market's swift recovery. In the second quarter, 89,000 jobs were added to the employment market. At the same time, 9,700 units were leased and the county added 37,000 new households to Los Angeles County. Marcus & Millichap expects equally strong job growth in the second half of the year, ultimately predicting that 250,000 jobs will be added to the market this year.

A new supply demand imbalance is also driving the low vacancy and increasing rents. The dynamic is the most severe in the luxury segment, where class-A vacancy rates have decreased in all of the major sectors of the Los Angeles market. Although there will be 10,500 new apartment deliveries this year, only Greater Downtown Los Angeles, which includes Mid-Wilshire and Hollywood, is reporting an increase in supply. The Westside Cities, San Fernando Valley and South Bay-Long Beach, however, will see a 10% to 35% decrease in new home deliveries.