- Market Softening Amid New Developments: By Q3 2023, vacancy rates rose to 4.2% due to new developments, though asking rents increased by 3.5% year-over-year.
- High Property Values in Core Areas: Santa Monica and Beverly Hills remain premium markets, with average prices per unit exceeding $400,000. Inglewood and Koreatown offer attractive cap rates.
- Sales Activity Decline: Multifamily sales activity dropped over 50% compared to 2022, with median prices around $283,400 per unit and cap rates averaging 5%.
Strategic Insights:
- Explore Value-Add Opportunities: Consider emerging markets like Koreatown, Inglewood, and North Hollywood for lower entry prices and strong rental growth.
- Maximize Value in Premium Markets: Maintain premium assets in areas like Santa Monica and Venice through renovations and upgraded amenities.
- Capitalize on Stable Rental Markets: Leverage stable rental prices in high-demand areas like Westwood and Santa Monica to ensure consistent income.
- Consider a Long-Term View: Look for balance between cash flow and appreciation by investing in emerging markets with higher cap rates.
Contact Frank at (310) 503-4158, and Viktorie at (424) 301-0075 with The Ponce Real Estate Group for personalized advice and opportunities.
