Glendale 2-4 Unit Properties Selling At Record Prices

Glendale 2-4 Unit Properties Selling At Record Prices

The graph above shows the average sales price per unit of residential income properties in Glendale and Burbank over the last ten years. I think this kind of data is kind of hard to ignore, especially when there is so little inventory currently on the market. First, let’s clarify what that graph means. So theoretically, if I own a 4 unit multifamily property in Glendale, in glory days of the real estate bubble in 2006 my building might have been worth somewhere around a million bucks. Today, it’s not unusual to see buildings like that trade for 5%-10% above asking price, in the $1,100,000-$1,300,000 range.¬†Also, I want to point out that over the last ten years, only 62 of these properties have actually traded hands.

Skipping back to the topic of the “asking price”, let’s take a look at another interesting graph:

(By the way, let’s get a round of applause for CoStar and their amazing data research services.) Glendale Burbank Sale To Asking Price Differential

This one shows us the sales price to asking price differential. Typically, sellers used to get really cheesy low-ball offers on their properties and because most of them had loans maturing or wanted to exchange into a newly built home, they had to take what offers they had. Today, there is such a high demand for these types of investments that we get flooded with buyers calling us for about a week after we list it on the open market. We’re currently in the middle of selling a property at 1163 Western Ave in Glendale. Upon listing the building at fair market value, my e-mail, phone, and website were getting anywhere between 70-100 inquiries a day for the first two weeks from buyers or buyers’ agents.

“Pricing ahead of the market” was a trend in the last bubble. The market was on a constant incline and that meant a seller could list their home today for fair market value and have that property be worth even more a week after. So, naturally, you had sellers who would put fairy tale price tags on properties and would actually get it because financing was so easy to come by. Today though, there is so little inventory and such a high demand for multifamily properties that no matter what you list your building at, you’re bound to have enough interest to be able to start a bidding war.

Where Do We Go From Here?

As many of my mentors used to say, “Nobody has a crystal ball that can tell us what the market will be like a year from now.” However, we do have data and some brain cells left. I’m no economic analyst and have no business making market predictions, but it’s my guess that we’ll continue to see improvement in the multifamily sector in Glendale and Burbank simply because of the major opportunity at hand for property owners to get the high price they’ve been waiting for and strong demand for apartment¬†investments. This will go on until the new residential unit developments in the area begin to compete directly with vacancies of older buildings.

Enough about my thoughts on the subject! Let’s hear what you have to say.

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