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9/17/20
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This report was provided by Kidder Mathews
Multifamily transaction volume in Long Beach is way down, according to Kidder Mathews September 2020 Multifamily Market Update. The total sales volume for the first half of 2019 was $342.8 mil, but came in at just $173 mil for the first half of 2020.
What is the reason for this turbulent year? Corona Virus is the kneejerk reaction, but Kidder Mathews believes there are a multitude of factors that have contributed to the data shown. AB 1482 initiated a statewide rent control ordinance capping rental increases to roughly 5% plus CPI. This new law dampens the ability to quickly realize the potential rental upside. Additionally, the Covid 19 pandemic created heavy economic ramifications for secondary and tertiary local business. The eviction moratorium has made it difficult for land owners to evict delinquent tenants as the measure allows tenants to forebear their rents until February 2021.
The Long Beach market has seen a decrease in sales volume since its height in mid 2018, while values have been holding up since. However, the combined factors mentioned in the previous paragraph have widened the gap between seller’s and buyer’s expectations in 2020.
Kidder Mathews believes this gap explains the decreasing market activity for the first half of this year. Comparing the first half of 2019 to the first half of 2020 there has been a 50% decrease in total sales volume and 33% decrease in properties sold.
*Data was taken from CoStar
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