In this 2021 Mid-year Market Update, we will cover:
- How’s the multifamily real estate market in Long Beach, California?
- Fourplex Market Statistics
- Number of Sales
- Average Sales Price
- Average Days on Market
- Average Active Inventory
- Are mortgage interest rates going to remain low in 2021?
- When will the Eviction Moratorium end?
- Are we in a real estate bubble like 2007?
- Advice for Real Estate Investors looking to Sell or Buy
Fourplex Market Statistics in Long Beach, CA
Number of Fourplex Sales
First Half of 2020: 33 Fourplexes Sold
First Half of 2021: 63 Fourplexes Sold (+91% increase)
Sage Advice: A massive increase of 91% in fourplex sales is a great indicator of a healthy market. We are certainly exceeding the amount of sales from last year, and are on track to sell over 100 (which is usually the annual average) fourplexes in 2021.
Average Sales Price
First Half of 2020: $1,095,000
First Half of 2021: $1,238,000 (+13% increase)
Sage Advice: The real estate market is still booming and there’s a lot of confidence in the economy.
Average Days on Market
First Half of 2020: 18 days
First Half of 2021: 30 days (+66% increase)
Sage Advice: It’s not concerning that properties are taking longer to sell. This is most likely caused by the massive increase of apartment buildings being listed on the market. A larger pool of buyers with an average of 30 days on market is still a good indicator.
Average Active Inventory
First Half of 2020: 37 Fourplexes
First Half of 2021: 21 Fourplexes
Sage Advice: This metric is an important indicator of the market’s health for buyers and sellers. There are less options to choose from in the market, which signals that there is a lot of movement going on. There is excitement and confidence in the economy.
Are we in a real estate bubble?
Absolutely not! We are not in a real estate bubble and we are not going to experience a real estate market crash. Apartment owners and real estate investors have tremendous equity with their properties, and people are getting legitimate loans which is the opposite of what happened in 2007.
Are mortgage interest rates going to remain low in 2021?
Our trusted sources are telling us that mortgage interest rates are going to remain low until the end of 2021, and quite possible until early 2022 (but there’s no guarantee). We advise that you take advantage of these low interest rates and invest in real estate during 2021.
When will the Eviction Moratorium end?
The Eviction Moratorium was recently extended until September 30, 2021. Although the Eviction Moratorium has been heavily affecting certain landlords and is over-extended past its necessity, the numbers are telling us that it hasn’t been significantly affecting the multifamily real estate market in Long Beach, CA.
Advice for Real Estate Investors looking to Sell or Buy
For apartment owners who want to time the market to sell their property: Your property has never been worth more than ever before. More properties are selling than ever before, and there is less competition. The numbers are telling us that this is the perfect time to put your property on the market.
For real estate investors who want to buy a property: The California Housing Crisis will not be simply solved in 10, 20, or even 30 years. So when you invest in real estate, you’re investing in a scarce business that has demand right now and well into the future. This demand is what drives a property’s appreciation and allows real estate investors to build wealth, financial freedom, and eventually retire some day.
If you’re still waiting until prices go down, you’re going to be waiting for a very long time. You need to capitalize on the low mortgage interest rates, which counts as your Cost of Capital. The longer you wait, the longer you’re preventing yourself from getting in the game and building wealth through real estate.