Radius Group Commercial Real Estate Releases Findings for Santa Barbara Investment Property Market |
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Santa Barbara, Calfornia - 12/6/07
Radius Group Commercial Real Estate Releases Findings for Santa Barbara Investment Property Market. Study Shows prices of smaller apartment properties down 25% since 2005.
Radius Group Commercial Real Estate has recently announced findings from Scott Glenn’s study of Multi-Family property activity in the city of Santa Barbara. City of Santa Barbara Multi-Family Trends shows an overall steady rise in price per unit of all types of Multi-Family properties from 2000 to 2005 with a decline in 2006 and 2007 in the value of smaller apartment properties.
“According to our findings, this is a great time for investors to start looking for bargains and making offers,” said Scott Glenn, Principal at Radius Group. “The average number of days a property is on the market has doubled since 2006 so we would expect to see significant price reductions as sellers want to ensure their properties are sold.”
The study examines data on sales per unit of multi-family properties between 2000 to 2007 and compares trends among three types of property (2-4 units, 5-9 units and 10+ units) and in relation to the general housing market. Key data points are Price Per Unit, Days on the Market and Number of Transactions.
Key trends identified in the study include:
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Price Per Unit values of 2-4 unit properties (duplex to four-plex buildings) closely seems to be following the trend of the general housing market in Santa Barbara.
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A drop in Price Per Unit values in 2006 and 2007 can be attributed to a number of factors including the tightening of lending policies by national lenders, the fear of a housing ‘bubble’ and a general decrease in real estate speculation and investment.
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All types of Multi-Family property values increased until 2005, but only the 10+ unit apartment buildings maintained stable growth after 2005, indicating that the 10+ apartment market may be more resilient to the changes that have taken place in the housing market in the past two years. This trend may be largely due to smaller properties such as duplex and triplex may be owner occupied and more subject to residential market trends, whereas larger units are purchased exclusively for income potential.
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Since 2005, four-plex properties have seen the largest decrease in value in terms of price-per-unit., a 25%, decrease in value as compared to 17% for a duplex and just .5% for a triplex.
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The average number of Days on Market has increased significantly in 2007, increasing by 76% over 2006. To date in 2007, the average time a multi-family property is on the market before sale is 106 days, compared with an average of 48-71 days during 2000-2006.
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The total number of transactions in this market remained relatively constant between 2000-2004, with a peak in 2005 followed by sharp decline in 2006. A relatively constant number of transactions were completed each year between 2000-2004.
Click here to view the full report in PDF format. | |
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