For most pre-1978 LA City owners considering a sale in the next 24 months, yes — the pricing window is closing through 2026. For post-1995 Costa-Hawkins exempt owners, the market is stable and institutional demand is active, so timing matters less. For all sellers, transaction volume recovered meaningfully in 2025 and continues into 2026 — the 2023 trough is behind us.
That's the market answer. Whether "now" is a good time for you specifically depends on your building's regulatory regime, your own timeline, and your next-use for capital.
Transaction volume: $6.5 to $7.9 billion in 2025 across 557 deals — a meaningful recovery from 2023's $4.6B trough, still below the 2021 peak of ~$12B. 2026 should track $7 to $9 billion.
Cap rates: Blended LA metro at 5.6% (up 40 bps YoY). Submarket-specific ranges matter more than the metro blend. Most submarkets have stabilized after 2023-2024 expansion.
Buyer pool: Institutional capital that went dark in 2023 returned in 2025. Private equity value-add, family offices, and 1031 exchangers all actively bidding. Especially deep on post-1995 inventory.
Rent growth: Flat to modest. LA effective rent at $2,279/unit per Colliers. Asking rent at $2,652 per Yardi Matrix. Concessions are in the market but narrowing.
Supply: 14,563 units delivered in 2025. ~11,000 expected in 2026. New construction starts are down 53% from 2023 peak, which supports rent growth trajectory into 2027.
The December 2025 LA City Council vote rewrote the RSO formula. Effective July 1, 2026, allowable rent increases on pre-1978 LA City buildings drop from an 8% ceiling to a 4% ceiling. The floor drops from 3% to 1%. Utility reimbursement and dependent occupant bumps are eliminated.
Buyers have been repricing for this since January 2026. Cap rates on pre-1978 LA City inventory have expanded 20-40 basis points relative to 2024 underwriting. The repricing is not complete — institutional buyers led, 1031 exchangers and family offices are catching up through Q3-Q4 2026.
What this means for pre-1978 LA City owners:
- Closing in Q2 2026: pricing reflects partial-rewrite underwriting
- Closing in Q4 2026: pricing reflects fully-repriced buyer models
- The difference is typically 4-8% of sale price on a standard LA multifamily transaction
For this cohort, "good time to sell" has a specific time dimension through 2026. The window is open now and narrows each quarter.
Three situations where waiting is the better call:
You own post-1995 Costa-Hawkins exempt inventory and your personal situation is stable. The post-1995 premium is widening, institutional demand is strong, and the trajectory is favorable. If you're not facing a specific reason to sell, holding captures future appreciation at low management friction.
You're under 65 with high appreciation and no estate planning reason to sell. Holding until death receives stepped-up basis, eliminating all deferred capital gains. If the building cash flows well and you have decades, the tax math favors holding.
Your building has significant pre-listing preparation gaps. Selling a building with RSO registration issues, unpermitted work, or documentation gaps at current pricing leaves meaningful money on the table. Fixing those items first — even if it delays the listing by 90 days — typically nets more.
Five situations where 2026 is a strong year to transact:
Pre-1978 LA City, large rent gap, no near-term turnover. The RSO rewrite caps your ability to close the gap. Selling captures the current value.
Post-1995 Costa-Hawkins exempt, clean Class A/B, institutional-grade size ($5M-$20M). Q2-Q3 is peak institutional bidding season. Listing into that cycle captures the deepest buyer pool.
Owner over 65 with 1031 plans. Use the sale to redeploy into DSTs, net-lease, or passive replacement while the deferral still defers — and the stepped-up basis eventually eliminates.
Owner with declining management capacity. Selling now locks in value at current conditions. Continuing to hold delays a decision that's already effectively made.
Owner with a specific next-use for capital. 1031 into a better-performing market. Diversification across asset classes. Liquidity for a business investment or life event. When the capital has a better job to do, now is the right time.
"Is now a good time to sell" is market-phrased, but the answer is usually seller-phrased: is now a good time for you?
The LA multifamily sellers who consistently do best over time are the ones who transact on their own clear reason — retirement, portfolio rebalancing, management fatigue, specific capital need — and find the best exit the market will support. They don't try to time market peaks (knowable only in retrospect) or wait for ideal conditions (rarely arrive as expected).
2026 has specific dynamics that favor certain owner profiles (pre-1978 LA City, institutional-grade post-1995). It has fewer specific reasons to wait for 2027 or 2028. If your own situation suggests selling, the market is adequate to good for that decision.
Request a free evaluation — including an honest read on whether your specific building warrants transacting in 2026 →
Related reading:
- LA Multifamily Market Report 2026
- Should I sell my apartment building or keep it?
- The State of LA Multifamily 2026 — The Sterman Report
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap. $1.41 billion across 254 closed transactions.
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