SoCal Multifamily Sales Pulse -August 29, 2021 - September 4, 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
Does Biden Administration Look to Jeopardize Benefits of 1031 Exchanges?
In a recent Green Street report, sources say that “while prior administrations have suggested ending 1031 exchanges, chances are better now that it will happen.” The threat is real. One of the differentiators this time is the amount of stimulus that has been pumped into the economy, and, not surprisingly, policymakers are looking for revenue to offset the debt that has been created.
Biden has proposed ending 1031 exchanges to help fund his proposed child care and family-leave legislation. There also are ongoing talks over increasing capital-gains taxes, which would hurt institutional owners more but would still cut into private-capital profits.
Some owners are choosing to sell now even though doing so would incur taxes, and others are waiting to see what happens with the tax code. If wealthy individuals lose the favorable tax treatment, they are less likely to sell properties moving forward. Owners whose cost of capital increases because of harsher tax treatment likely will hold properties longer.
Feel free to give me a call to discuss your options and
whether or not it makes sense for you to sell now or wait.
Are you a tired landlord looking for an out to the moratorium "situation"? Reach out to me regarding special pricing on listing and selling your property quickly.
Orange County multifamily had 21 Closed Sales Last Week. This is the highest number of weekly closed sales we’ve in several months. The Closed Sales - Average Days on Market remained low at just 29 days. Out of the 21 Closed Sales Last Week there were 13 Transactions Sold At or Above Asking Price.
Orange County’s SALE OF THE WEEK was this 6 unit building on Porter Ave. in Fullerton. This 6 unit building was built in 1958 and consisted of all 1 bedroom 1 bath units. The property was located on a cul-de-sac in what’s known as the Porter Avenue Villas. It was listed at $1,475,000 and sold for list price, all cash, as soon as it hit the market. It was previously on the market for 407 days at $1,500,000 but never sold. The property sold at $375 per sq. ft. and there was room to increase the rents about 10%.
As far as listing inventory goes, Orange County had just 6 New Listings Last Week. This is quite a bit off from the norm. Orange County typically averages about 10-15 new listings per week. The Months of Inventory dropped from 4 months previously to just 2 months currently. With the Absorption Rate dropping from 2.63 months to just 1.75 months, this is the lowest Absorption Rate out of the 5 Southern California counties. The Orange County multifamily market just keeps getting tighter and tighter.
Looking at the 3-year trend charts you can see from the Number of Monthly Sales; overall activity was up last month. The Days to Sell, Average was up slightly but remained in the 30’s. But the big story is The Number of Active Listings dropped below 200 for the first time in the past 3 years and the Number of New Listings last month was just 68 new listings. This is the lowest Number of New Listings we’ve seen since December of last year.
Long Beach multifamily had 10 Closed Sales Last Week. This is about average for Long Beach weekly closed sales. The Closed Sales - Average Days on Market was lower than normal at just 22 days. Out of the 10 Closed Sales Last Week, 6 Transactions Sold At or Above Asking Price and 5 closed sales were All Cash Transactions.
This week's Long Beach SALE OF THE WEEK is this 8 unit building located on 62nd Place on the Peninsula in Long Beach. The units were four 1 bedroom 1 bath and four 2 bedroom 1 bath. The property was built in 1964. It was originally listed at $3,300,000 and sold for $3,475,000 in 15 days. The property is just one building from the sand. This is a perfect value add property as most if not all of the units are in need of upgrading. Rents were low and could be increased by as much as 20-50%.
With just 6 New Listings Last Week the Long Beach listing inventory remained below 100 for the 4th consecutive week. Months of Inventory dropped to 3 months after being at 5 months previously. Active Listings, Dollar Volume dropped to just over $230,000,000 and hasn’t been this low in months. Long Beach’s Absorption Rate dropped from 3.21 months to just 1.98 months. This gives us a further indication that the Long Beach market continues to be highly desirable for investors.
Looking at the 3-year trend charts there was a big increase in Number of Sales last month with 49 closed sales after just 33 closed sales in the prior month. The monthly Days to Sell Average continued dropping. The Active Listings Number is now at its lowest point since January 2020. So, if you’re considering selling your Long Beach apartment building now would be a good time since inventory is at a low point not seen in almost 2 years.
Los Angeles County
Los Angeles County had 97 Closed Sales Last Week. A strong week in closed sales for Los Angeles County. The Closed Sales - Average Days on Market was 44 days which is right at normal. The typical Days to Sell for LA County is around 40-45 days. Just about half, or 47 of last week's closed sales were Transactions Sold At or Above Asking Price. Out of the 97 Closed Sales Last week, 40 were duplexes.
The Los Angeles County SALE OF THE WEEK was a 6 unit building located on 206th St. in Torrance. Originally listed at $1,180,000 the building sold for $1,225,000 in just 3 days. The units were four 1 bedroom 1 bath and two 2 bedroom 1 bath. There was significant upside in rents of around 25-30%. The property sold for just over $204,000 per unit and $315 per sq. ft. Last month’s Average Price Per Sq. Ft. for LA County was $505.
With 118 New Listings Last Week LA County listing inventory fell back down below 1,800 listings after moving above 1,800 listings in the prior week. The Absorption Rate increased – going from 3.75 months previously to 4.08 months currently. Months of Inventory increased from 10 months previously to 11 months currently.
Looking at the 3-year trend chart the Days to Sell Average fell to 40 days. Which is a low not seen in over 3 years. The total Number of Sales was down slightly to 422. But this is the lowest it’s been in 6 months.
San Diego County
San Diego County multifamily had 11 Closed Sales Last Week. San Diego County continued with a low Average Days on Market with properties selling on average in just 15 days.
Out of the 11 closed sales, 8 closed sales were duplexes. And 8 of the closed sales were Transactions Sold At or Above Asking Price. There was only 1 All Cash Transaction Last Week.
For San Diego County listing inventory, there were 22 New Listings Last Week. This is just about normal for new listings per week in San Diego County. Months of Inventory dropped from 15 months previously to 11 months currently. The Total Number of Active Listings dropped back down below 200 listings after being at 200 listings in the prior week.
The 3-year trend chart saw the Number of Monthly Sales increase to 103 sales. This is the second highest number of monthly closed sales in the last 3 years. The Days to Sell Average dropped to the second lowest it’s been in the last 3 years to just 20 days. New Listings last month plummeted from 169 new listings in the previous month to just 125 new listings last month.
Riverside County multifamily had 5 Closed Sales Last Week. That’s down from 6 closed sales in the previous week. The Closed Sales - Average Days on Market was 37 days. This is pretty much average for Riverside County days on market. Out of the 5 Closed Sales Last Week, 4 closed sales were Transactions that Sold At or Above Asking Price. There were 3 FHA financed closed sales last week.
With 10 New Listings, Last Week Riverside County listing inventory was back at or above 100 listings last week with 100 Total Number of Active Listings currently. Riverside County's weekly listing inventory typically runs between 95-105 listings per week. Months of Inventory increased from 3 months previously to 4 months currently as the Absorption Rate increased from 2.74 months previously to 3.29 months currently.
Looking at the 3-year trend chart for the Number of Monthly Sales, the number continued to drop with just 29 total closed sales last month. This is with the Number of Active Listings remaining pretty steady.
San Bernardino County
San Bernardino County multifamily had 8 Closed Sales Last Week. Half of those closed sales were Transactions Sold At or Above Asking Price. The Closed Sales - Average Days on Market was 132 days. This stat was skewed by one property being on the market for 612 days and another property being on the market for 227 days. If we remove these two closed sales from the stats the Closed Sales - Average Days on Market drops to a more normal, 36 days.
San Bernardino County listing inventory had 8 New Listings Last Week putting the Total Number of Active Listings at 136 listings. This is down from most prior weeks as listing inventory in San Bernardino County usually runs on average at about 150 listings plus or minus. The listing inventory hadn’t been in the 130 active listings range since July of this year. The 3-year trend chart for Number of Active Listings shows a gradual downward trend. The Average Price Per Sq. Ft. rocketed up to $336 per sq. ft. The Number of Monthly Sales went back up to 60 closed sales last month after dropping to 48 closed sales in the prior month.