In the weeks since the Coronavirus Pandemic has changed daily life in our communities, economy, and market we’ve heard from many of our clients. In this rapidly changing environment, the most pressing question has been “What’s going on in the market?” Experts across the real estate investment community have been speculating on the trajectory of real estate markets in every asset class. Predictions range across a wide spectrum from dire to nonchalant.
Although we can’t claim to know the future, our experience has taught us the best hedge against uncertainty is data. We’ll leave the national economic forecasting and analysis to the economists. There is precious little quality local level timely data on our own real estate market. To that end, we’ve started releasing our market studies on a monthly basis rather than our usual quarterly intervals.
2nd Quarter/June 2020 Update:
Below is a sampling of some trend charts illustrating income metrics, pricing, volume, and inventory numbers right here in our local South Bay Los Angeles multi-family market. Monthly metrics are shown beginning in January of 2020. When we began tracking this data monthly in March, we expected January through February (and maybe March) to present a base case, after which the effects of the pandemic would be clearly visible in our local data. Although the country tipped into recession towards the end of Q1 2020, Q2 numbers in our local real estate market look surprisingly ordinary. GRM and cap rates remained basically flat through June, while price per square foot and price per unit actually increased. We’ve been watching sales volume and inventory as potential leading indicators for value changes ahead. Sales volume predictably fell from 2019 levels both in Q1 and again in Q2, yet inventory has not meaningfully spiked. Inventory is up from levels seen in March, April, and May, but still below levels seen through most of 2019.
We will continue to update these charts on a monthly basis and release the results as soon as we have them available. All available metrics and market studies can be downloaded from our website, here. We hope everyone is safe and healthy.
All Market Trends and Market Studies can be downloaded from: “PLANNING AND RESOURCES”
