Moderately growing job market
Los Angeles nonfarm employment increased by 6,356 jobs over the past year, reflecting continued labor market growth despite high interest rates. As of December 2024, the unemployment rate in Los Angeles stands at 4.7%, compared to the national rate of 4%.
While the Los Angeles Metro continues to see a steady stream of new jobs, sustaining positive net absorption remains a challenge, resulting in a negative absorption figure for 2024. However, this represents a 36% decrease compared to 2023.
Vacancy is at an all-time high
During the post-pandemic era, increased vacancy rates have been experienced consistently year-over-year. However, throughout 2024, the rate of increase has slowed on the quarter-to-quarter basis. Alongside this, office rents have started to rise as the market is showing signs of recovery.
Capital markets activity picked up
During the last quarter of 2024, the market saw $958 million of sales volume, a 38% increase from the third quarter but only 8% below the five-year quarterly average. Market weakness and questions around the future trajectory for office space have damaged investor demand. Sales activity in the metro is driven by owner/users and private buyers. The current market conditions provide these buyers with leverage and opportunities to acquire quality properties at attractive prices.
