SoCal Multifamily Sales Pulse - December 12, 2021 - December 18, 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
Fed Clears a Path for Higher Interest Rates Next Year
The Federal Reserve Open Market Committee announced some significant changes in monetary policy: a faster tapering of bond purchases and the possibility of as many as three rate hikes next year. The reasons are concern about inflation, which has been more dogged than the institution had expected, and an improved job landscape. The question for commercial real estate is how the combinations of actions will affect markets.
Interest rates could rise up to three times next year, with the end of 2024 seeing the Fed’s key rate at 2.1%, according to the New York Times. According to Oxford Economics, this could mean three 25-basis point hikes in 2022, three in 2023, and two in 2024.
Both the interest rate and tapering news could have a significant impact on CRE. An increased rate at which banks can borrow means higher interest rates all around, although many in real estate have been expecting this to happen in the near future for some time. Tapering reduces the amount of capital being injected into the economy, lowering the pressure on finding places to invest and, with lower demand, lower prices and values in theory. However, it’s important to remember that there are enormous sums of capital already in markets.
Here's more information about the expected upcoming interest rate increases.
Orange County
Orange County multifamily had 9 Closed Sales Last Week. This is on the low side of the weekly average of closed sales for Orange County. The Closed Sales Average Days on Market was high than normal at 58 days. The inflated average days on market was caused by 1 closed sale being on the market for 286 days. Out of the 9 Closed Sales Last Week there were 5 Transactions Sold At or Above Asking Price. There was just 1 All Cash Transaction Last Week.
The Orange County SALE OF THE WEEK is a 4 plex on Corsican Dr. in Huntington Beach. The property was listed at $1,850,000 and sold for $1,925,000 in 3 days. The major cross streets are Goldenwest St. and Warner Ave. The property is located in a cul-de-sac, near Bella Terra shopping center, and was built in 1968. The units consist of one 3 bedroom 2 bath, two 2 bedroom 2 baths and one 1 bedroom 1 bath. Two units were recently upgraded with beautiful wood flooring, stainless steel appliances, white cabinetry, and completely renovated bedrooms and bathrooms. There are 4 enclosed garages. The property sold at 19.38 x gross and a 3.5% cap rate.
Looking at Orange County multifamily listing inventory, Orange County had 8 New Listings Last Week. Over the last couple of months, this has been about normal for the weekly number of new listings for Orange County. The Total Number of Active Listings remained at 100 or above for another week and now stands at 100 total listings. The current activity looks strong with 16 listings moving from active status to Active Under Contract Last Week.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version SALE OF THE WEEK
Long Beach
Long Beach multifamily had a strong week of sales activity with 15 Closed Sales Last Week. Long Beach typically has been averaging about 7-10 weekly closed sales. The Closed Sales - Average Days on Market was normal at 39 days. 9 0f the 15 Closed Sales Last Week were Transactions That Sold At or Above Asking Price.
The Long Beach SALE OF THE WEEK is a 4 plex on Carroll Park. The property was listed at $2,000,000 and sold for $2,000,000 in 10 days. Built in 1923. Properties like this and in this location are rarely available. Located just 3 blocks to the ocean. The property consists of 4 different structures. There’s a 2 story 5 bedroom 2 bath Craftsman Chalet Bungalow with approx. 3,000 sq. ft., two 2 bedroom 1 bath units and a studio above the garage. The total building size is 5,225 sq. ft. Existing rents were approx. 20% under market. The property sold at 24.69 x gross on existing rents. The price per sq. ft. was $382. The average price per sq. ft. in Long Beach is $527.
Long Beach multifamily listing inventory had 6 New Listings Last Week. The Total Number of Active Listings dropped below 70 listings for the first time this year and now stands at 68 total listings. The Months of Inventory remained at 4 months. The Active Listings, Dollar Volume dropped to just over $170,000,000. This is the lowest Active Listings, Dollar Volume we’ve seen since November 2017 when prices were a lot lower than they are currently.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version SALE OF THE WEEK
Los Angeles County
Los Angeles County multifamily had 84 Closed Sales Last Week. This number of weekly sales isn’t at the level that we had a few weeks ago when there were 114 closed sales but it's still a pretty good week of closed sales for Los Angeles County. The Closed Sales - Average Days on Market was at the very peak of the typical weekly average at 46 days. There were 44 of the 84 Closed Sales Last Week that were Transactions That Sold At or Above Asking Price.
LA County listing inventory had 84 New Listings Last Week. The Total Number of Active Listings dropped below 1,400 total listings and is now at 1,373 total listings. This is the lowest number of active listings in LA County Since January of this year. Sales activity remained about the same as the level we’ve seen over the last couple of weeks with 37 active listings moving to Active Under Contract Last Week.
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 had 17 Closed Sales Last Week. This is a solid week of closed sales for San Diego County. The Closed Sales - Average Days on Market was 32 days. There were 11 of the 17 Closed Sales Last Week that were Transactions Sold At or Above Asking Price. There were just 3 of the 17 Closed Sales Last Week that were All Cash Transactions. Of the 14 Financed Transactions Last Week there were 2 transactions that used FHA financing for the purchase.
For listing inventory, San Diego County had 11 New Listings Last Week. This is on the low side of the average for San Diego County's new listing activity. The Total Number of Active Listings dropped further to 87 total listings. The Months of Inventory remained at 13 months.
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 6 Closed Sales Last Week. The Closed Sales Average Days on Market was higher than usual at 98 days. The reason for the inflated Average Days on Market was caused by 1 Closed Sale Last Week that was on the market for 659 days. 5 of the 6 Closed Sales Last Week were Transactions That Sold At or Above Asking Price. There were no All Cash Transactions Last Week.
For Riverside County listing inventory, there were 3 New Listings Last Week. The Total Number of Active Listings went down just 1 listing, dropping from 71 total listings previously to 70 listings currently. The Months of Inventory remained at 4 months. Weekly sales activity was slow with just 2 listings moving from active status to Active Under Contract Last Week.
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 had 12 Closed Sales Last Week. This is a good week for closed sales activity for San Bernardino County. The Closed Sales - Average Days on Market was normal at 35 days. There were 3 of the 12 Closed Sales Last Week that were Transactions That Sold At or Above Asking Price. There were 4 All Cash Transactions Last Week.
San Bernardino County listings inventory had 9 New Listings Last Week. The Months of Inventory moved up from 8 months previously to 9 months currently. The Total Number of Active Listings dropped down to 85 total listings after dropping in the previous week to 90 total listings. There was just 1 listing moving from active status to Active Under Contract Last 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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