SoCal Multifamily Sales Pulse - March 27, 2022 - April 2, 2022
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Here's What's Happening In The Market, Here’s What This Means For You
Multifamily Lending to Hit Record $493B in 2022
There was an impressive 79 percent year-over-year jump in originations in fourth-quarter 2021, completing what MBA estimates was a total volume of $900 billion for the year. 2022 is forecast to be even higher.
Total mortgage borrowing and lending is expected to break $1 trillion for the first time, a 13 percent increase from 2021’s estimated volume of $900 billion. This is according to MBA’s new forecast released last month.
Multifamily lending alone is forecast to rise to $493 billion in 2022–a new record and a 5 percent increase that surpasses last year’s record total of $470 billion. MBA anticipates borrowing and lending to remain high in 2023, with slightly more than $1.0 trillion of total commercial real estate lending and $474 billion in multifamily lending.
The Pulse of the Market
- Vacancy declined 30 basis points during 2021 to 3.4 percent, reaching its lowest figure in the market since early 2017. The rate held steady in the fourth quarter. Local asking rents are expected to continue to rise throughout the rest of 2022, although the pace of growth is expected to slow following recent spikes. Average rents in Orange County are forecast to increase 6 percent in 2022.
- Cap rates in Orange County remain low. Nearly every property that sold recently transacted with a cap rate below 3.5 percent.
- Multifamily investors in Southern California regained confidence in recent quarters after unprecedented rent growth and a tightening vacancy rate. As the local economy continues to gain momentum and reaches a full recovery, Southern California will remain an increasingly attractive and stable market for investors.
- Cap rates in the market are typically among the lowest in the country. With inflation rising, investors may look at adding to real estate portfolios as a natural hedge against rising costs.
- Multifamily sales activity spiked in the second half of 2021 as the market reached new highs for transaction volume. Prices pushed higher, reaching $384,700 per unit through the end of 2021.
Orange County
Orange County multifamily sales have had strong weeks of sales recently with typical weeks of sales numbering around 15 or more. There were 17 Closed Sales Last Week. The Closed Sales - Average Days on Market was in the normal range at 36 days. There were 7 Transactions Sold At or Above Asking Price. Of the 17 Closed Sales Last Week there were 7 All Cash Transactions Last Week. The monthly Absorption Rate declined further last month and is now down to just 1.27 months.
Looking at the monthly charts for Orange County. The Average Days to Sell was up slightly to 39 days and has seen an increase over the last 2 months. The Number of Active Listings continues to decline as is at an all-time low. The Number of New Listings has increased overall, over the last 4 months. To show how strong the market is – even though the total Number of Active Listings has decreased to its lowest level ever, the Total Number of Sales increased. So even with low inventory, there are still quite a few transactions occurring.
Looking at the listing inventory for last week there were 10 New Listings Last Week. This has been about the average for weekly new listings lately. There were 85 Total Active Listings last week. This is down from 91 total listings in the prior 2 weeks. The Months of Inventory went from 3 months previously to 2 months currently. The Active Listings, Dollar Volume dropped below $400,000,000 which is the lowest this stat has been in almost 4 years.
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 had 7 Closed Sales Last Week. This stat has been bumping up and down between 4-8 closed sales per week for the last few weeks. So this is about average for closed sales for Long Beach. The Closed Sales - Average Days on Market was elevated at 54 days. More than half, or 4 of the 7 Closed Sales Last Week were Transactions Sold At or Above Asking Price. There was just 1 All Cash Transaction Last Week. The monthly Absorption Rate decreased from 2 months previously to 1.79 months currently.
Taking a look at the monthly stat charts. The Days to Sell Average was up to 45 days. This is after being at the second-lowest rate ever in the previous month. The Number of Active Listings is now at the lowest point ever at just 120 listings. The Number of New Listings kept in line with the previous 2 months with 45 new listings last month. The Number of Sales for last month was up slightly and still about the same level it’s been for the last 5-6 months.
The listings inventory for Long Beach had 8 New Listings Last Week. This stat has been between 4-10 new listings each week for the past few weeks. The Months of Inventory remained at 4 months. The Total Number of Active Listings was at 61 listings. This stat has been seen a minimal increase over the last 4 weeks.
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 had a strong week in Closed Sales with 86 Closed Sales Last Week. The Closed Sales - Average Days on Market was in the normal range at 39 days. There were 50 Transactions Sold At or Above Asking Price. Indicating strong demand from investors and the need to be aggressive with your offer if you’re a buyer. The monthly Absorption Rate was down from 3.82 months previously to 3.17 months currently. More indications of a competitive market.
LA counties' monthly stats didn’t see a lot of change from the previous month in most cases. The Average Days to Sell stat was down to 54 days after hitting 58 days in the previous month. The Number of Active Listing was almost unchanged. The Number of New Listings was down slightly but still up from late last year and earlier in the year. The one stat that saw the most change was the Number of Sales, which increased from 351 in February to 427 last month.
Los Angeles County listings inventory had an increase of 126 New Listings Last Week. LA County has had strong weeks of new inventory each of the last 4 weeks. This brings the Total Number of Active Listings to 1,366. Even with the strong weekly increase in new listings, the Total Number of Active Listings hasn’t moved much from week to week. The Months of Inventory went from 14 months previously to 13 months currently.
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 13 Closed Sales Last Week. This is on the low end of the average for weekly closed sales for San Diego County. The Closed Sales - Average Days on Market remained low at just 22 days. There were 7 of the 13 Closed Sales Last Week that were Transactions Sold At or Above Asking Price. There were only 4 All Cash Transactions Last Week. The monthly Absorption Rate decreased from 1.74 months in the previous month to 1.48 months currently. The San Diego County monthly Absorption Rate is the second-lowest rate in Southern California, trailing only Orange County.
For the monthly stat charts. The Days to Sell Average was still extremely low at just 21 days. The Number of Active Listings was almost identical to the previous month. The Number of New Listings increased sharply with 141 new listings last month. The monthly Number of Sales was up but still on the low end with 77 total sales last month.
Listing inventory had a big increase last week with 31 New Listings Last Week. The Total Number of Active Listings moved up to 113 total listings last week. This brings the Total Number of Active Listings back above 100 from the prior week when it dropped to 99 listings. The Months of Inventory dropped to 5 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 a good week for closed sales with 10 Closed Sales Last Week. The Closed Sales Average Days on Market was about normal at 42 days. 5 of the 10 Closed Sales Last Week were Transactions Sold At or Above Asking Price. And half of the closed sales were All Cash Transactions Last Week. The monthly Absorption Rate increased slightly from 1.86 months previously to 2 months currently. Riverside County is the only county in Southern California that saw an increase in the monthly Absorption Rate last month.
Reviewing Riverside Counties' monthly stats. The Days to Sell Average stayed on the low side at just 36 days. The overall trend for this stat over the last 12-14 months has been downward. The Number of Active Listings saw a decrease last month after seeing an increase in the previous month. The Number of New Listings last month was down again after seeing a decrease in the previous month. The Number of Sales was down moderately from the previous month. With just 33 total monthly sales there’s just not a lot of sales due to the lack of inventory.
Looking at the inventory stats for Riverside County. There were just 3 New Listings Last Week. The Total Number of Active Listings is down to just 66 listings. The Months of Inventory remained at 9 months. The Active Listings, Dollar Volume fell to its lowest point since August of 2020.
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. That’s a good strong week of sales activity for San Bernardino County. The Closed Sales - Average Days on Market was at 30 days. Of the 12 Closed Sales Last Week there were 9 Transactions That Sold At or Above the Asking Price. The monthly Absorption Rate was down from 2.47 months previously to 2 months currently.
San Bernardino County’s monthly charts for the Days to Sell Average was almost unchanged at 51 days. The Number of Active Listings was down again. And now sits at the lowest point ever. Property owners in the Inland Empire are just not selling these days. More indications of this is reflected in the Number of New Listings, which was down from the previous month. The Number of Sales was up slightly to 43 total sales but still on the low end for this stat.
The weekly inventory stats for San Bernardino County show 13 New Listings Last Week. This increases the Total Number of Active Listings from 79 listings in the prior week to 88 total listings last week. The Months of Inventory went from 13 months in the previous week to 11 months 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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