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strength of the affordable housing market. Affordable housing saw less of an impact throughout COVID and has seen a faster recovery than four and five star communities. This tracks with the changes in tenants’ desire for more space between neighbors and an increased need for space as the home became an office, schoolhouse, and gym as well. The village and tower style living became less popular during the pandemic and many people gravitated to older, more spacious buildings.
With a massive increase in job growth, in both LA and the nation, the future is looking very strong. LA is currently the second largest metropolitan market in the nation. Currently there are 25,000 new units under construction and the sales volumes of apartment properties reached $10.5 billion. In addition, the average market pricing for apartment properties, $390,000/unit as of Q3, is well above the national average of $230,000/unit.
The industrial market continues to perform well, and showcase that it is a strong and consistent investment in both upward and downward markets. Currently the leasing volume is slightly lower than this time last year but more units are projected to come online soon. Over the next two years, we are expecting very high increases in demand and supply.
2021 has given us many lessons on our outlook and investments. The past two years have clearly demonstrated that when the market is down, apartments are in high demand and industrial units are consistently strong. So as we go forth into the coming years, keep in mind that multi-family and industrial properties are great, low-risk options for your portfotolio. However, each investor and each portfolio has its own goals and strategies. If you are seeking guidance on your investment strategy in the new year, we would be honored to speak with you. Please contact us anytime we can be of assistance.
*Data and analysis from this article is courtesy of CoStar. This material should not be relied upon for predictions of future results but to provide you with background, information and education.
ORANGE COUNTY
Vacancy rates in the OC dropped off significantly during the pandemic and are forecasted to remain lower than pre-pandemic levels in the years to come as the demand and supply gap closes. This, coupled with the prediction that Orange County employment will fully recover by Q3 2022, offers a very positive outlook for the new year.
If you are interested in getting involved in the Orange County commercial market, the Reynolds Realty Advisor can answer your questions and assist you in finding and managing the right property. Contact RRA at (866) 613- 7772 or elizabeth@reynoldsrealtyadvisors.com.
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