Multifamily Investments Down 31% In OC This Year

Another interesting market insight that crossed my feed earlier this week. Multifamiy Sales Volume is down 31% in Orange County due to lack of inventory.

Despite rising interest rates and compressed cap rates, investors are still drawn to the strong economy of Orange County, the author writes (link here).

As an agent and investor who works in Southern California, I can confidently say that these market conditions are not exclusive to Orange County. Across Southern California we are seeing many deals trade off market, and those that do trade on the open market going for above list price. Anecdotally, I have noticed that things are starting to slow compared to last year though, whether that be a result of low inventory, or investors wary of where we are in the cycle - it appears we are at or have passed the peak. The one exception I have noticed is on value add opportunities where an investor has significant upside that they can capture on the stabilization of the property.

The article goes on to say that 'submarkets are supporting new development to increase the supply'. After years of historic lows in new development, this is welcome news - but also indicative of where we are in the cycle. We know that when developers start adding supply it is usually at the end of the cycle.

As a result investors should (as always) evaluate any moves that they make with where we are in the current cycle based off our current market conditions. Please reach out to me with any questions!

Link to article below

"Multifamily Sales Volume Down 31% in OC"

Happy Investing!

John Alden