SoCal Multifamily Sales Pulse - January 25, 2021 - January 31, 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
There are a lot of mixed signals in the apartment industry right now. While valuations continue to rise, a lot of renters are still having trouble making their monthly payments.
In a recent report, Fannie Mae identifies another concern—increasing supply. Most of the new supply will consist of expensive Class A properties concentrated in about 15 urban core neighborhoods. It expects supply to continue outpacing demand in some places this year. This should drive the vacancy rate to between 6.0% and 6.5% in 2021. Still, it notes that this range is well below the most recent estimated vacancy peak of 8.25% in Q4 2009.
Another pressure on the asset class: last year rent growth turned negative for the first time since 2009, ending the year at negative 0.75%, after eight straight years of growth above historical averages. In 2019 estimated rent growth was 2.5%.
While rent growth slowed, demand stayed stable in 2020. CoStar Portfolio Strategy estimates that net absorption totaled 326,874 units last year, after about 320,976 units were absorbed in 2019. In 2021, CoStar projects only 113,178 units of net absorption.
Fannie Mae expects the negative rent growth trend to continue at the beginning of the year, but it also anticipates it will turn positive in the second half of the year. Overall, it projects rent growth will end 2021 at 0.0% to 0.5%, assuming widespread COVID-19 vaccinations and a sustained economic recovery.
Orange County
Just 6 Closed Sales last week for Orange County Multifamily. This is about half of the normal weekly sales amount of 12-15 Closed Sales. Closed Sales - Average Days on Market went from 72 days the prior week to 93 days last week. That stat was up from just 9 Average Days on Market 3 weeks ago. Months of Inventory is now up to 5 months from previously being at 3 months. Could the market be slowing? Most of the stat indicators show that it might be. This is something to keep a close eye on in the next few weeks. Hopefully, it's just the typical beginning of the year slow down.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
Long Beach
Long Beach Multifamily saw just about normal activity last week with 8 Closed Sales. Closed Sales - Average Days on Market went down to 25 days after being at 81 days and 38 days the prior 2 weeks. New Listings Last Week was about normal at 14 New Listings and the Total Number of Active Listings remained pretty steady at 129. Months of Inventory increased from 3 months to 5 months.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
Los Angeles County
Los Angeles County multifamily sales remained pretty consistent with 65 Closed Sales Last Week. Closed Sales - Average Days on Market was also pretty consistent at 51 days. New Listings Last Week were down slightly to 126 New Listings. This is down from the normal of around 145-150 New Listings. There were 56 Expired Listings Last Week which is higher than the typical average of around 25. Months of Inventory jumped to 13 months. Past Months of Inventory are typically at around 8 months.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
San Diego County
San Diego County multifamily sales were pretty much normal last week. All sales stats remained pretty consistent across all the indicators. New Listings Last Week was down slightly with 13 New Listings Last Week when the typical weeks New Listings are around 20 New Listings. Months of Inventory increased from 12 months to 13 Months of Inventory. There were 12 Expired Listings Last Week. The normal number of Expired Listings Last Week is usually around 4 Expired Listings.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
Riverside County
Riverside County Multifamily had 9 Closed Sales Last Week. Of the 9 Closed Sales, 3 transactions were all cash and 3 transactions closed using FHA financing. Average Days on Market was high due to one sale taking 576 days, and three other sales at 200, 146 and 131 Average Days on the Market. The typical Average Days on the Market is around 60 days or less. There were 11 New Listings Last Week, with the typical amount of New Listings is around 6 New Listings. Months of Inventory went from 4 months to 5 Months of Inventory.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
San Bernardino County
San Bernardino County multifamily had 10 Closed Sales Last Week. This amount of Closed Sales is pretty consistent for the area. Strong demand reduced the Closed Sales - Average Days on Market to just 10 days. There were 6 Closed Sales selling At or Above Asking Price - another indicator of strong demand, although Months of Inventory increased from 9 months to 10 Months of Inventory. There were 11 Expired Listings Last Week, up from the typical amount of approx. 1-3 Expired Listings in a normal week.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
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