SoCal Multifamily Sales Pulse - May 22, 2022 - May 28, 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

Is A Recession Coming? Experts Are Divided And 'Everyone's So Nervous'

Recently six speakers at a Miami Beach real estate conference gave six different answers to the question: are we heading into a recession?

A recession does not equal a housing crisis. That’s the one thing that every real estate owner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean real estate will lose value.

The National Bureau of Economic Research (NBER) defines a recession this way:
“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators.

To help show that real estate prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, real estate prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean real estate values will fall or depreciate.

The Bottom Line

We’re not in a recession in this country, but if one is coming, it doesn’t mean real estate will lose value. History proves a recession doesn’t equal a housing crisis.

Let me know what you think. Do you think we are already in a recession or is there a recession coming? Post a comment at the bottom of this page.

The Pulse of the Market

Across Southern California, the single-family home market has hit the brakes due to the recent interest rate increases. Sellers are putting their homes on the market to try to take advantage of what's left of the hot market. But sales are down 19% year over year. Orange County home sales dropped 28% year over year. Even with the slower sales, the median price is up 21% over 12 months. So far, the slowdown hasn’t shown up in the SoCal multifamily market. More than likely, it’s because rents are still increasing and the supply isn’t meeting the demand.

WHAT TO EXPECT:
I expect the SoCal multifamily market to stay hot throughout the summer and early fall. Some investors will drop out of the market due to increasing interest rates but I don’t expect a dramatic increase in inventory because of it. Price should continue to increase but not at the same pace that we’ve seen in the last couple of years.

<< Back

---

Comments

No comments.

Register here or Login here to be able to add comment.