OC Apartment Brokers
SoCal Multifamily Sales Pulse - June 27, 2021 - July 3, 2021
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Here's What's Happening In The Market, Here’s What This Means For You
Mortgage Servicers Brace For Fallout As Covid Bailout Comes To An End
The nation’s mortgage servicers are gearing up for the biggest wave of delinquent loans since the subprime mortgage crisis, but this time they say they are ready.
The first wave of borrowers to enter the government’s coronavirus mortgage bailout program are entering their last possible quarter for relief, which means that come September they will either have to start paying, sell their homes or go into foreclosure.
Mortgage bailout programs, both government and private sector, launched at the start of the Covid pandemic. The government originally allowed borrowers to delay their monthly payments for up to a year. That was then extended to 18 months. Each quarter, borrowers must re-up.
An estimated 7.25 million borrowers have participated in forbearance programs at one point or another throughout the pandemic, representing 14% of all homeowners with mortgages, according to Black Knight. About 72% of all participants have since left their plans, while 28%, or just more than 2 million, remain in active forbearance.
This week and next, a total of more than 350,000 borrowers will be reviewed for extension or removal from forbearance, according to Black Knight. Of the 146,000 plans reviewed this week, 44,000 homeowners left forbearance, while the plans of 102,000 were extended. With roughly two-thirds of borrowers remaining in forbearance, Black Knight estimates that 575,000 plans will expire in September and the beginning of October, meaning mortgage servicers will be facing the daunting task of dealing with about 15,000 troubled loans per day.
Orange County
Orange County multifamily Closed Sales Last Week was down from 21 closed sales the prior week to 16 Closed Sales Last Week. Closed Sales - Average Days on Market dropped to just 19 days. If your an Orange County multifamily investor and you see a property you like, don't delay in submitting an offer. Out of the 16 Closed Sales Last Week there were 7 closed sales in coastal/beach cities. One astute investor was able to successfully play monopoly and purchased three contiguous 4 plexes in Santa Ana.
The Total Number of Active Listings remained about the same at 154 listings. Active Listings, Dollar Volume remained below $500,000,000 for the second consecutive week.
The monthly Average Cap Rate and Average Gross Multiplier were unchanged from last month while the monthly Absorption Rate went from 1.63 months to 1.9 months. Orange County still has the lowest monthly Absorption Rate out of any of the other Southern California counties. But not by much - Long Beach is a close second at 1.95 months.
List of Closed Sales
Southern California
Long Beach multifamily Closed Sales Last Week came in at average with 10 Closed Sales Last Week. Closed Sales - Average Days on Market held steady at 34 days on market.
Overall listing inventory dropped again from 100 listings the prior week to just 90 listings last week. The pickings are getting slim for multifamily properties in Long Beach.
The monthly Absorption Rate also dropped, going from 1.98 months to 1.95 months. The Average Gross Multiplier jumped from 13.3 last month to 14.28 this month. While the Average Cap Rate was relativity unchanged at 4.76% this month and 4.77% last month.
List of Closed Sales