SoCal Multifamily Sales Pulse - June 12, 2022 - June 18, 2022

• 05 July 2022
• Mike Lembeck

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

Of course the Fed has announced the largest interest rate increase since 1994 at .75 of a percentage point. Real estate for the first quarter of this year remained hot as buyers flooded the market with mortgage rate hikes looming on the horizon. Now that we are nearing the end of the second quarter of 2022, we’re seeing higher inflation numbers, rising interest rates, tech industry layoffs, and other signs of a slowing economy. There is a lot of uncertainty out there right now. The good news is homeowners keep building equity: 44.9% of residential properties were considered equity-rich in the first quarter of 2022, up from 31.9% in the first quarter of 2021. Any homeowners facing foreclosure have equity they can tap into to refinance, or leverage to sell. Higher interest rates and robust real estate prices will make it more challenging for buyers, however as bidding wars slow down, there is also opportunity for investors that have the money set aside and patiently wait for the right deal.

The Pulse of the Market  

Most areas rebounded last week with the number of closed sales pretty close to prior weeks. Again, these are deals that were agreed to 30-60 days ago. There was a .75 point increase in interest rates last week and that increase probably won’t show up in the sales until 30-45 days. We have seen a drop in properties going under contract and that is the true indicator of the current market. In Orange County there are 96 two and three unit buildings, and 45 fourplexes available.  In the 5+ units category there are 37 properties available. At the start of 2022 there were just 89 total listings available in Orange County. So there’s been an overall increase of 89 listings in Orange County.  In Long Beach there are 47 two and three unit buildings, 24 fourplexes and 33 buildings with 5 or more units. At the start of 2022 there were just 57 total listings available in Long Beach.  So there’s been an overall increase of 47 listings in Long Beach. In both Orange County and Long Beach the inventory has nearly doubled from the start of 2022.

With the current market conditions- I suggest that you don’t try to sell your property off market. You need the most exposure in order to maximize the value and equity in your property. I encourage you to review my extensive marketing program that gives your property the maximum amount of exposure to enable you to realize the most profit when you sell.

WHAT TO EXPECT
Many experts believe a recession will begin in 2023. This will not cause a housing crash however, and the market is not collapsing. It’s an adjustment after the highs of last year and having investments in real estate can bring financial stability for investors, particularly with real estate values expected to continue to rise. Let me know what you think is going to happen. Post your comments at the bottom of this page.

As always, feel free to give me a call or send me an email with any questions on the market. Many of the investors we work with stress about what to buy if they were to sell at the top of the market. What we do is we find them off-market deals or alternative investments, so they can achieve higher returns than they are currently receiving now. The way to increase your wealth is to sell at the current historically high prices and find alternative investments where you can get as high or more passive returns and continue to increase your wealth. Let me know if you’d like to have me analyze your situation and property to help determine your equity position for a potential sale or 1031 exchange.

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