The correction in the Los Angeles multifamily investment property market seems to have hit hard, with median sale price and median price per square foot down 30.4% and 22.1% respectively over the same quarter last year
New York (PRWEB) August 26, 2008
PropertyShark.com, the premier real estate data website, today released its quarterly investment property report covering multifamily property sales in New York City, Los Angeles, and San Francisco for the second quarter of 2008.
"The correction in the Los Angeles multifamily investment property market seems to have hit hard, with median sale price and median price per square foot down 30.4% and 22.1% respectively over the same quarter last year" stated Bill Staniford, CEO of PropertyShark.com.
Key high Level Findings:
- Major setback in number of sales - Compared to Q2 2007, all three regions saw major setbacks in the number of sales. New York City, down 29.4%, experienced the steepest decline among the three areas. In Q2 2008, New York City saw the lowest value for closed multifamily building transactions over a two year time period, while in California the two counties saw a slight increase from Q1 2008, at which time both regions experienced two-year lows.
- New York City prices revert back to 2006 levels - All price indicators continued their downward trend with the median sale price, down 7.7%, and the median price per square foot, down 4.7%, compared to Q2 2007. The current levels are similar to those in Q2 2006, their lowest point in the past two-years.
- Almost half of Los Angeles transactions were distressed sales - Properties in distress (foreclosures and pre-foreclosures) represented more than 45% of all multifamily home sales in Los Angeles County, a huge jump from the 11% distressed sale rate from Q2 2007. Despite an increase from the first quarter of 2008, the number of closed transactions was down 16% from the same quarter last year and down 43% from it's peak level in Q2 2006.
- San Francisco and Los Angeles see a substantial price decline - Both California counties saw significant price declines, well below their previous two-year record lows. Compared to the second quarter of 2007, the median sale price fell 30.4% in Los Angeles and 15.3% in San Francisco. The median sale price per unit fell 24.7% in Los Angeles, and 13.9% in San Francisco, compared to the same time period of Q2 2007.
PropertyShark.com issues the quarterly Investment Property Report to provide real estate investors with quantitative market insight about multifamily buildings, defined as Two Family Dwellings, Three Family Dwellings, Four Family Dwellings, Five or More Family Dwellings, and Mixed Use Properties. It does not include single family homes, coop or condo units, or other commercial or industrial buildings. (Full report available at http://www.propertyshark.com/mason/BlogCenter/index.html)
- SF Transactions drop: The number of closed transactions in the multifamily sector was down 16.4% compared to Q2 2007.
- Two Year Lows in San Francisco: The median price per square foot in San Francisco was $290, down 3.6% from Q1 2008, and down 11.9% from Q2 2007. The median price paid per unit was $300,000 in Q2 2008, down 5.2% from Q1 2008, and down 13.9% from Q2 2007.
- Transactions increase over Q1 2008: The Los Angeles multifamily market experienced three consecutive quarters of declines in the number of closed transactions until this quarter, when sales transactions increased by 32% compared to the first quarter of 2008. However, in comparison to Q2 2007, the number of sales declined by 16%.
- Distressed multifamily properties drive sales: The rebound in the number of sales can be partially explained by dynamics in the foreclosure sector, with distressed properties in Q1 and Q2 2008, accounting for more than 45% of the total number of sales (29% trustee sales and 16% notices of default).
- All price indicators down: Median price per square foot (down 22%), median price per unit (down 25%) and median sale price (down 30%) all decreased by a large rate compared to the same quarter last year, reaching a two-year low.
- Brooklyn's median price per square foot experienced a slight decrease of 2.6%, when compared to the second quarter of 2007. In Queens, the median price per square foot dropped 9.2% compared to Q2 2007 and reached, at $266, the lowest level in two years.
- The number of closed sale transactions was at or near two year lows in Queens and Brooklyn for the second quarter of 2008 across 2-4 Family Buildings, 5+ Family Buildings, and Mixed Use Buildings.
- Prices stay up in Manhattan: Although the number of transactions plunged 51.1% in comparison to Q2 2007, the median price per square foot reached a two-year high in Manhattan this quarter for deals that did get done. Sales crossed the $1000 price per square foot threshold for the first time in the two-family, three-family, and four-family building classes in Manhattan.
"The tightened conditions for a commercial loan revealed their adverse effects on larger investments in The Bronx, manifesting in a 55% drop in five or more family building sales compared to the second quarter of 2007" stated Radu Farcas of the Comparables Product Team at PropertyShark.com.
About PropertyShark.com: With over 25 million properties in twenty major markets, PropertyShark.com provides real estate professionals and investors with data and tools on all aspects of property, including building details, ownership information, recent sales prices, property values and comparable sales, sophisticated maps, for lease listings, foreclosures and pre-foreclosures, mailing lists, photos, and more, available directly from the web. PropertyShark.com strives to level the playing field by offering independent real estate firms, investors, and savvy consumers the information transparency essential to evaluate real estate and make informed decisions. For more information go to: http://www.propertyshark.com