Karick Brown

📊 Los Angeles Multifamily Market Q3 2024: What It Means for Buyers The latest data shows some intriguing shifts in the LA multifamily market: 🔻 Median Price Per Sq Ft is down 11% 🔻 Median Price Per Unit fell by 6% 📈 Cap Rate jumped 51 bps to 5.23%, signaling higher potential returns for investors 📈 Effective Rents are up 1%, indicating steady demand 📊 Transactions surged by 21%, showing increased investor interest What does this mean for buyers? Lower prices and rising cap rates make it an ideal time for investors to explore opportunities. A higher cap rate means a better return on investment (ROI), offering increased cash flow potential for multifamily properties. With rents holding firm and demand steady, buyers can capitalize on these dynamics, particularly as market values adjust. 🔑 Key Takeaway: Lower purchase prices and better returns make this an attractive moment for savvy investors. Whether expanding your portfolio or entering the market, the current conditions in Los Angeles create an opportunity for long-term gains. 💡 Tip: Monitor cap rates closely and align your investment strategy to exploit current trends. hashtag#RealEstateInvesting hashtag#MultifamilyInvesting hashtag#LosAngelesRealEstate hashtag#CapRate hashtag#InvestmentOpportunities hashtag#CRE hashtag#RealEstateTips hashtag#InvestorMindset hashtag#PropertyInvestment

Los Angeles Market occupancy tightens as rental rates and investment sales volume experiences growth The Los Angeles apartment market closed Q2 2024 with an occupancy rate of 94.9%. This represented an increase of 52.8 basis points from Q2 2023. The overall average monthly asking rate for apartments in Los Angeles ended Q2 2024 at $2,792 per unit, which was up 1% from Q2 2023. The total apartment units net absorbed in Q2 2024 was 3,095, compared to 548 units in Q2 2023. There were 3,513 new apartment units delivered in Q2 2024, compared to 4,314 units in Q2 2023. The total apartment sales in Q2 2024 amounted to $747.8 million in total volume, compared to $334.3 million in Q2 2023. The average price per door in Los Angeles was $255,883 in Q2 2024, 12.5% higher than in Q2 2023. https://lnkd.in/g-FBZPpG

As affordable housing disappears, states scramble to shore up the losses BY JESSE BEDYAN AND ARUSHI GUPTA Updated 5:18 AM PDT, October 6, 2024 Share LOS ANGELES (AP) — For more than two decades, the low rent on Marina Maalouf’s apartment in a blocky affordable housing development in Los Angeles’ Chinatown was a saving grace for her family, including a granddaughter who has autism. But that grace had an expiration date. For Maalouf and her family it arrived in 2020. The landlord, no longer legally obligated to keep the building affordable, hiked rent from $1,100 to $2,660 in 2021 — out of reach for Maalouf and her family. Maalouf’s nights are haunted by fears her yearslong eviction battle will end in sleeping bags on a friend’s floor or worse. While Americans continue to struggle under unrelentingly high rents, as many as 223,000 affordable housing units like Maalouf’s across the U.S. could be yanked out from under them in the next five years alone. It leaves low-income tenants caught facing protracted eviction battles, scrambling to pay a two-fold rent increase or more, or shunted back into a housing market where costs can easily eat half a paycheck. It’s the lifeblood of affordable housing development,” said Brian Rossbert, who runs Housing Colorado, an organization advocating for affordable homes. That lifeblood isn’t strictly red or blue. By combining social benefits with tax breaks and private ownership, LIHTC has enjoyed bipartisan support. Its expansion is now central to Democratic presidential candidate Kamala Harris’ housing plan to build 3 million new homes. The catch? The buildings typically only need to be kept affordable for a minimum of 30 years. For the wave of LIHTC construction in the 1990s, those deadlines are arriving now, threatening to hemorrhage affordable housing supply when Americans need it most. https://lnkd.in/gsMDnHpg

U.S. Housing Starts: Not Just Under the Weather Sal Guatieri, Senior Economist, [email protected],The weakest U.S. housing starts since the pandemic-led shutdowns are fairly convincing evidence of restrictive monetary policy. Starts unexpectedly plunged 5.5% in May, more than retracing a downwardly-revised 4.1% advance in April, and now down a whopping 19% from a year ago. The level of 1.277 million (annualized) is the lowest since June 2020. The decline was spread across single-family and multi-family units and spanned three of four major regions. While unusually wet weather may explain a portion of the weakness, the prior two months were also depressed. Moreover, building permits, which are much less sensitive to shifts in the weather, also fell sharply, by 3.8% after big declines in the prior two months. The level of 1.386 million is also the lowest since the shutdowns. The data flag a sizeable retreat in Q2 residential construction that will weigh on GDP growth. Don't expect starts to rebound in June, according to the latest home builders' activity index (NAHB), which fell to a six-month low of 43 this month (below the neutral 50 mark). While listings remain lean in the resale market, demand has been depressed by high mortgage rates that are keeping affordability at the worst levels since the mid-1980s. Moreover, sales of new single-family homes have trended lower, resulting in a 9-month supply, well above the typical 6 months. Bottom Line: While a growing population and workforce are providing some support, U.S. home builders won't become busier until borrowing costs fall. Thankfully, this is one more report pushing the needle toward a Fed rate cut later this year.

Consumer confidence in housing market reaches highest level in two years Source: Mortgage Orb Consumer confidence in the housing market increased in September, as per Fannie Mae’s Home Purchase Sentiment Index (HPSI), which rose to a score of 73.9, the highest in two years. The share of survey respondents who say it is a good time to buy a home increased 2 percentage points (19 percent) in September compared with August, while the percentage who say it is a bad time to buy decreased from 83 percent to 81 percent. Conversely, the percentage of respondents who say it is a good time to sell a home (65 percent) remained unchanged compared with August, while the percentage who say it’s a bad time to sell (35 percent) increased 1 percentage point. The share of respondents who say they expect mortgage rates to go down in the next 12 months increased from 39 percent to 42 percent, a new survey high – while the percentage who expect mortgage rates to go up increased from 25 percent to 27 percent. https://lnkd.in/gsjhsUGY

U.S. Productivity Growth Decelerates in Q1 Jay Hawkins, Senior Economist, [email protected], Nonfarm labor productivity growth moderated to an annualized 0.3% in the first quarter, down sharply from an upwardly revised 3.5% in the fourth quarter and 4.6% in the third quarter. This is the slowest pace of growth since the first quarter of 2023. Output increased 1.3% – the smallest gain since the second quarter of 2022 – while hours worked rose 1.0%. Despite the sharp monthly slowdown, productivity is 2.9% higher than a year ago, up from 2.7% in the third quarter and the largest annual gain since the first quarter of 2021. Unit labor costs, or what it costs a business to produce one unit of output, accelerated sharply to an annualized 4.7% rate, reflecting a 5.0% increase in compensation and the muted rise in productivity. Unit labor costs are up 1.8% year-on-year, down from 2.4% in the fourth quarter and the smallest advance since the second quarter of 2021. Bottom line: While the sharp slowdown in productivity growth and corresponding surge in unit labor costs amid robust compensation growth will be a concern for the Fed, policymakers will take some comfort from the more moderate year-on-year rise in unit labor costs.

Federal Reserve’s rate hikes have curbed borrowing, yet not eased consumer spending or output crucial to battling inflation. Economist Matthew C. Klein notes post-GFC debt aversion shifted spending to income growth, making today's spending sustainable despite rising rates. Read the entire article below. #CRE #EconomicUpdate #PortlandRealEstate #realestateinvesting

Beige Book Paints a Mixed Picture of Economic Activity Jay Hawkins, Senior Economist, [email protected], The Federal Reserve Beige Book describes an economy that is still expanding though slowing. Most Districts cited “slight or modest growth”, while two observed “no change in activity’. Consumer spending was “flat to up slightly” amid softer discretionary spending and “heightened price sensitivity among consumers”. Auto sales were basically unchanged with a few regions mentioning that manufacturers were “offering incentives to spur sales”. On a more upbeat note, travel and tourism “strengthened” across most Districts, though the outlook for summer travel was mixed. Meanwhile, “tight credit standards and high interest rates continued to constrain lending growth”, while the general outlook “grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risks”. Labor Market Employment “rose at a slight pace overall”, with eight Districts reporting “negligible to modest job gains” and the other four reporting “no changes in employment”. Most regions reported ‘better labor availability”, though shortages persisted in certain industries and geographies. Multiple Districts stated “employee turnover has decreased” and one District noted that “employers’ bargaining power has increased”, pointing to a looser labor market. Hiring intentions were mixed, with some areas seeing a “pullback in hiring” amid “weaker business demand”. Finally, wage growth was “mostly moderate”. Prices Prices rose at a “modest pace” while most areas stated “consumers pushed back against additional price increases”, resulting in lower profit margins. Retailers offered discounts to “entice customers” and many regions reported a “continued increase in input costs”. Inflation is "expected to continue at a “modest pace in the near term”. Bottom line: The depiction of U.S. economic activity expanding at a more modest pace is in harmony with our forecast of slower real GDP growth this year, particularly as consumers’ cut back on discretionary spending amid still-elevated prices and rates and weaker employment growth.