So Cal Multifamily Sales Pulse - March 3, 2024 - March 9, 2024

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Here's What's Happening In The Market, Here’s What This Means For You

If CMBS Defaults Keep Rising, Interest Rates on New Deals Could Jump
The financing mechanism is important as banks pull back from CRE and many property owners need options.

Homeownership Moves Even Further Out of Reach Even as Inventory Increases
To make a difficult situation even more difficult, it now takes longer to save up for a downpayment.

Key Indicator Signals ‘Recession Ahead’ – Fed Faces Pressure to Cut Rates
There is no denying that measured inflation increased considerably in January. The question is whether it means inflation will likely be higher than previously expected in the months ahead. 

Fed Still Worried CRE Poses Risk to Bank System
And interest rates cuts aren’t coming until the central bank has ‘greater confidence’ that inflation is moving toward 2%.

Multifamily Developer Confidence Remains Negative
Tight lending standards and high loan costs have put pressure on the industry.

Supply Chain Headaches Persist 4 Years Into Pandemic
As the fourth anniversary of COVID-19’s arrival in the U.S. nears, contractors are still dealing with challenges around materials pricing and availability.

It IS Possible to Find Financing for Apartments
Yes, cost of capital, price discovery and lack of interest rate stabilization took their toll in 2023.

Fed Pressured to Cut Rates as Key Indicator Signals ‘Recession Ahead’
Inflation is not coming down to the Federal Reserve’s supposed 2% target – let alone low enough to cease being a persistent problem for millions of families.

Southern California Home Sales Rise After Two-Year Slump
Year-over-year sales in six counties rose 7% in January to nearly 11K deals

Rethinking CRE Foreclosure Statistics
Foreclosures deferred by COVID-related policies that temporarily reduced risk are now showing up.

Southern California Home Prices Take Biggest 2-Month Dip In 12 Years
January's sales, while up 7% vs. 12 months earlier,  were the third-slowest January since 1988.

Here’s Why Regional Banks Have So Much Commercial Real Estate Exposure
iI’s the smaller, regional banks that mostly bear the brunt of the stress because they have the highest exposure.

Commercial Real Estate Faces New Financing Landscape
Will rate cuts be enough to bring stability to commercial real estate (CRE) valuations and increase transaction volume? 

NYCB's Commercial Real Estate Exposures Among 'Key Concerns'
The main risk in New York Community's portfolio is their rent-regulated multi-family exposure, which is 22% of total loans.


Bonds Backed By Commercial Real Estate Loans Could Be The Next Pain Point For Markets, Economist Says
Delinquencies for commercial mortgage-backed securities — bonds backed by loans on commercial properties — have spiked over the last year.

Strong Job Market Boosts Prospects for Multifamily Rent Growth
Multifamily asking rents broke the five-month streak of sequential average declines in January, rising 0.07%.

CMBS Delinquencies Post Slight Increase in February
Year over year, the overall U.S. CMBS delinquency rate is up 159 bps.

Nearly 50 Banks Have Multifamily Loan Issues
At the end of 2023, 49 financial institutions had apartment nonperforming loans

Fed’s Powell Says Interest Rate ‘Likely at Its Peak’ But Don’t Expect Cuts Now
If the economy behaves ‘broadly as expected,’ lowering rates this year ‘will likely be appropriate,’ but uncertainty is still key.

Powell Reinforces Position That The Fed Is Not Ready To Start Cutting Interest Rates
Policymakers remain attentive to the risks that inflation poses and don’t want to ease up too quickly.

Key Takeaways From Fed Chair Powell’s Testimony On Capitol Hill
Powell gave lawmakers a positive assessment of the US economy’s health and its future.

Commercial Real Estate Challenges Are a ‘Manageable Problem,’ Powell Says
The Financial Stability Oversight Council identified commercial real estate as perhaps the most “salient risk to the financial system.

Why It’s Not All Doom And Gloom For Commercial Real Estate
After decades of growth bolstered by low interest rates and easy credit, commercial real estate has hit a wall.
Fed Admits It Was Wrong – Kind Of
During the pandemic recovery, inflation reached the highest rates in 40 years, largely driven by the Federal Reserve’s excessive monetary policy.
As Trump Rises, Embattled Powell May Use Rate Cuts to Boost Biden
'There's no reason to think the U.S. economy is in some kind of short-term risk of falling into recession...'
 

Orange County

Live MLS Link PDF Link

Orange County Closed Sales - MikeLembeck.com

Avg. Cap Rate: 4.44%
Avg. Gross Rent Multiplier: 14.74
18
Closed Sales Last Week
51
Closed Sales - Average Days on Market
$2,065,412
Closed Sales - Average Sales Price
7
Transactions Sold At or Above Asking Price
13
Financed Transactions Last Week
5
All Cash Transactions Last Week
18
2-4 Unit Transactions Last Week
0
5+ Unit Transactions Last Week

19
New Listings Last Week
6
Months of Inventory
198
Total Number of Active Listings
$644,385,284
Active Listings, Dollar Volume
7
Active Under Contract Last Week
2
Pending Listings Last Week
2
Expired Listings Last Week

Southern California

Live MLS Link PDF Link

Southern California Closed Sales - MikeLembeck.com

Avg. Cap Rate: 4.63%
Avg. Gross Rent Multiplier: 14.13
3
Closed Sales Last Week
57
Closed Sales - Average Days on Market
$4,549,148
Closed Sales - Average Sales Price
2
Transactions Sold At or Above Asking Price
3
Financed Transactions Last Week
0
All Cash Transactions Last Week
2
2-4 Unit Transactions Last Week
1
5+ Unit Transactions Last Week

14
New Listings Last Week
10
Months of Inventory
122
Total Number of Active Listings
$437,190,733
Active Listings, Dollar Volume
4
Active Under Contract Last Week
7
Pending Listings Last Week
3
Expired Listings Last Week

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