If you own multifamily property in California, you have probably had a moment of panic watching yet another video of a moving truck leaving the state. The message is always the same. Everyone is relocating. The state is emptying out. Your tenants are next. It makes for great content. It does not, however, match what is actually happening to your rent roll.
The Headlines Are Louder Than the Data
Here is the thing about a good exodus story. It needs a villain, a hero, and a U-Haul. What it does not need is context. And once you add context, the picture looks a lot less dramatic and a lot more, well, normal.
California’s population has grown for three consecutive years now, according to the state’s own demographic reports. We remain the most populous state in the country by a wide margin, and our economy still ranks among the largest in the world, ahead of most entire nations. People are leaving, sure. People are also arriving. Somehow only one half of that sentence ever makes it into the fear-mongering headline.
What This Actually Means For Your Building
For owners, the number that matters is not how many people are packing boxes. It is the demand for the units you own. And in Los Angeles, that demand has held up. Rents in most submarkets have stayed resilient, vacancy has not spiked the way you would expect if the state were truly hollowing out, and buyers are still competing for well-located multifamily assets.
I bring this up because we have watched more than one owner nearly make an expensive decision based on a narrative rather than their own numbers.
Two Owners Who Almost Believed the Hype
A few years ago, we worked with an owner of a mid-sized apartment building in the San Fernando Valley who was convinced, based almost entirely on what he was seeing online, that his property was about to lose value fast. He asked us to prepare it for a quick sale. Before listing, we walked him through his actual occupancy history, his rent growth over the prior two years, and comparable sales in his neighborhood. None of it supported the story he had been told. He held the property. It has since outperformed his original projections.
Around the same time, another owner with a small portfolio near the Westside called us convinced her tenants would start leaving en masse, as a friend had mentioned California’s “collapsing” population. Her buildings stayed fully leased that entire year, with a waitlist on two of her units. The exodus, it turned out, had not gotten the memo.
Neither of these owners was wrong to be cautious. Being cautious with your investment is smart. But caution should be based on your building’s actual performance, not a scary video with dramatic music.
Trust Your Numbers, Not the Narrative
None of this means California is problem-free. Every market has real challenges, and yours deserves a clear-eyed look, not a rosy one. But the state’s population is not shrinking, our economy is not collapsing, and multifamily demand in this state has proven far more durable than the headlines suggest.
Before you make a major decision about your property, whether that is selling, refinancing, or simply losing sleep, look at your own occupancy, your own rent growth, and your own comparable sales. That data will tell you far more than any viral moving truck ever could.
Kyle Crown is the President of Los Angeles Property Management Group. Prior to joining LAPMG in 2013, he worked as an Investments Analyst for KTR Capital Partners. He holds a Bachelor’s of Science in Business with a focus in Real Estate and Legal Studies from the University of Pennsylvania’s Wharton School of Business.
Visit their website at: losangelespropertymanagementgroup.com or you may contact them at: [email protected] or 323-255-9400.