SaMo’s multifamily “feeding frenzy”
is over: report

Dollar volume of sales dipped more than 40% between 2015 and 2016

TRD LOS ANGELES /
Jan.January 10, 2017 12:30 PM
Kimberly Roberts Stepp

The Santa Monica apartment market has “reached a true peak,” according to  less-than-sunny forecast by multifamily brokerage firm Stepp Commercial.

Overall sales volume for multifamily units in the city dipped 37 percent between the third quarter of 2015 and the same period in 2016, while dollar volume was down by 42 percent year-over-year, a Stepp report found.

“Properties are languishing on the market longer and the myth of the ‘foreign investor’ who is buying up everything at over-market pricing is simply not happening,” the report said. “We expect that prices will hold steady or soften in 2017 as the dramatic increases in rents slow from previous years.”

While there was a third-quarter increase in the average price per unit — from $414,178 in 2015 to $494,648 last year — the average price per property actually dropped from $5.3 million in 2015 to $4.3 million in 2016. And a 6 percent increase in price per square foot, from $460 in 2015 to $527 in 2016, is also marginal compared to previous year-over-year leaps, which have been as much as 29 percent.

Stepp projects that the market has topped out and may even begin to turn in buyers’ favor in 2017, especially if interest rates go up substantially.

“If the interest rates will grow further — and they will — these numbers are going to be squeezed even more,” Kimberly Roberts Stepp, co-founder of the brokerage, told TRD. “That’s why prices will go down; sellers will have to come to the reality that no one is going to pay more than $500,000 or $600,000 on a unit.”

Still, Stepp predicts that sales volume will remain steady in 2017.

“There’s nothing to be concerned about — having a SaMo property is still an awesome investment,” she said, pointing to a new report from Apartmentguide.com that names Santa Monica as the the priciest rental market in America. “The market’s just going to have to correct itself.”


Related Articles

arrow_forward_ios
Clockwise from top left: 1155 Angelo Drive, 1116 Laurel Way, 613 N. Sierra Drive, 32453 Pacific Coast Highway and 705 N. Arden Drive (Credit: Redfin)

Beverly Hills dominates list of top resi sales in LA County last week

420 West 9th Street, San Pedro (Credit: Google Maps and iStock)

San Pedro’s apartment project pipeline is filling up

David Nagel

Decron Properties, in multifamily expansion mode, pushes into Warner Center

Mill Creek Residential CEO William MacDonald and Modera West LA (Credit: iStock)

One of nation’s biggest apartment builders scores $165M refi on West LA development

From left: Canyon Crest Views Apartments and Sunset Ridge Apartments

Multifamily investor Afton Properties adds nearly 1K units to portfolio

Blackstone CEO Stephen Schwarzman and TruAmerica CEO Robert Hart

Blackstone digs deeper into SoCal with massive rental portfolio buy

Lightstone’s Eugene Rozovsky, Neil Shekhter and a rendering of 1650 Lincoln Boulevard

Lightstone provides $44M loan to Shekhter-owned WS Communities

5800 Green Valley Cir, Culver City (Credit: Google Maps)

Jones & Jones buy multifamily property in bustling Culver City

arrow_forward_ios