SoCal Multifamily Sales Pulse -August 1, 2021 - August 7, 2021
Disclaimer: All information contained herein is obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only. We make no claim(s) as to the accuracy or reliability of the information presented. If you wish for us to analyze your specific property or situation please feel free to call or email us anytime.
Here's What's Happening In The Market, Here’s What This Means For You
Los Angeles Apartment Dwellers Owe $3B in Back Rent
A new study from UCLA and USC found that tenants with rent debt in Los Angeles owe an average of $2,800 per tenant.
The UCLA/USC study surveyed 1,000 households to examine the accumulated rent debt, and found that nearly half of the households had difficulty making rent payments through the pandemic. Overall, 49% of tenants said that they owe some amount of money to their landlord, and among those that owe back rent, 20% owed less than a month's rent and 15% owed more than six months in total rent debt.
The current approach to rent assistance, which repays the landlord directly, falls short of helping many tenants that struggled through the pandemic, namely those that went into other forms of debt after prioritizing rent payments. Economists say that the commonsense solution is to give people cash directly to help people that are financially distressed make payments where needed. Concerns over fraud have kept this model from moving forward, but the study supports the concept, saying that the actual rate of fraud is less than 5%.
Orange County multifamily had 13 Closed Sales Last Week. Out of the 13 closed sales, 8 were duplexes. Typically, 9 of the 13 closed sales were located in coastal cities. The Closed Sales Average Days on Market remained about normal at 39 days. 8 of the 13 closed sales Sold At or Above the Asking Price. One sale of note was an 11 unit building on Warner in Huntington Beach built in 1988 that sold at $5,895,000. That’s $531,818 per unit.
Orange Counties Absorption Rate moved up from 1.9 months previously to 2.63 months currently. The Average Cap Rate went from 4.22% to 4.38% currently and the Average Gross Multiplier went from 14.95 to 14.75.
The Total Number of Active Listings moved up to 166 listings. Months of Inventory remained at 4 months but with 166 Total Active Listings that’s the highest number of currently active listings in Orange County in about 3 months. Active Listings, Dollar Volume moved up also to over $542,000,000. So we're seeing a bit of an increase in inventory in Orange County.
Long Beach multifamily had 11 Closed Sales Last Week. That’s up from 6 the prior week and is about average for Long Beach weekly sales. The Closed Sales - Average Days on Market was just 19 days as the majority of the sales occurred in just 15 days or less. 8 out of the 11 closed Transactions Sold At or Above Asking Price.
The overall Absorption Rate jumped up to 3.21 months after being at just 1.95 months previously. The Average Cap Rate was unchanged and the Average Gross Multiplier went from 14.28 to 14.17.
Listing inventory last week was the same as the prior week with 106 Total Number of Active Listings. Months of Inventory moved down to 5 months after being at 6 months the prior week.
Los Angeles County
Los Angeles County multifamily had 71 Closed Sales Last Week. This is much lower than typical for Los Angeles County which usually ranges between 85-100+ closed sales per week. Closed Sales - Average Days on Market was a little bit lower than normal at 30 days. Transactions Sold At or Above Asking Price remained high with just over half of the closed sales selling at or above the asking price.
Los Angeles Counties Absorption Rate dropped from 3.98 months to 3.75 months. The Average Cap Rate was unchanged and the Average Gross Multiplier went from 14.28 to 14.17.
With 149 New Listings Last Week, Months of Inventory remained at 10 months. Active Listings, Dollar Volume continued its steady weekly increase and is now over $8,514,000,000.
San Diego County
San Diego County multifamily had 17 Closed Sales Last Week. Same amount as the prior week. All closed sales were 2-4 units, with most being 2-3 units. There were just two 4 plex closed sales. Closed Sales - Average Days on Market remained low at 29 days.
There were 3 All Cash Transactions Last Week. Of the Financed Transactions Last Week there were 2 transactions financed with FHA financing and 3 transactions financed with VA financing.
The Absorption Rate remained low but increased from 2.14 months to 2.64 months. The Average Cap Rate was practically unchanged at 4.7% and the Average Gross Rent Multiplier was also practically unchanged at 14.25
San Diego County multifamily had 27 New Listings Last Week. Months of Inventory fell to 15 months after being at 16 months in the previous week. The Total Number of Active Listings remained above 200 with 204 listings.
Riverside County multifamily had 8 Closed Sales Last Week. This is double the amount of the prior week and up from the past 3 weeks prior. Closed Sales - Average Days on Market remained just about normal at 45 days. Half of the 8 Transactions Sold At or Above Asking Price.
Riverside Counties Absorption Rate moved from 2.34 months to 2.74 months. The Average Cap Rate and Average Gross Rent Multiplier were both unchanged.
There were 11 New Listings Last Week. This is a recent high not seen in over a month but the Total Number of Active Listings remained at 96 listings.
San Bernardino County
San Bernardino County multifamily had 17 Closed Sales Last Week. The most in 1 week in several months. Typically San Bernardino sees about 8-12 closed sales per week. Closed Sales - Average Days on Market is about normal at 34 days. As usual we saw a lot of Transactions Sold At or Above Asking Price with 9 of the 17 closed sales Sold At or Above Asking Price.
The monthly Absorption Rate jumped from 2.16 months to 3.125 months. Big change there. The Average Cap Rate went from 6.28% to 6.37% and the Average Gross Rent Multiplier went from 9.47 to 9.55.
San Bernardino County multifamily had 20 New Listings Last Week. This stat is typically around 7-15 new listings. The Total Number of Active Listings is now at 150. The first time we’ve seen 150 listings in San Bernardino County for quite some time.