If you are thinking of selling or refinancing, here is some information you may want to consider:

VACANCY IS PEAKING – WHAT THAT MEANS FOR SELLERS (AND BUYERS) If you’ve been sitting on the fence about listing a multifamily property, this is the week to pay attention to one number: 5.7%.

That’s where Los Angeles metro vacancy currently stands — the highest it’s been this decade outside the pandemic-era spike in 2020. On its own, that sounds like bad news. But context matters: the national vacancy average is sitting at 8.6%, which means LA is still significantly tighter than most major markets in the country. Among the top 20 U.S. metros, we rank sixth for lowest vacancy.

Here’s the part that matters more: deliveries of new units are slowing sharply after several years of aggressive construction, and demand is stabilizing. That combination is expected to start compressing vacancy again by mid-2026 — which could hand pricing power back to landlords by late 2026 or early 2027.

 

WHAT THIS MEANS IF YOU ARE THINKING ABOUT SELLING. We may be at or near the bottom of this cycle. Owners who list now are selling into a market where buyers still have negotiating leverage — but owners who wait 12-18 months could be selling into a market where they have it back. There’s no wrong answer here, but there is a timing question worth having a real conversation about.

WHAT THIS MEANS IF YOU ARE BUYING. The properties best positioned to benefit from this shift aren’t the luxury towers — it’s well-managed 1-3 Star assets in more affordable submarkets. That’s the profile of most smaller multifamily holdings across Southern California, which means a lot of you reading this are sitting on exactly the kind of asset that’s about to be back in favor.

ONE MORE NUMBER TO WATCH. Rate relief may be coming too. Fannie Mae’s latest outlook has the 30-year fixed mortgage rate falling to around 5.9% by the end of this year — widely seen as the threshold that unlocks a wave of pent-up transaction volume that’s been on hold for years. If that holds, expect competition for well-positioned properties to pick up fast.

THE TAKEAWAY: this is a window, not a permanent condition. If you’ve been waiting for the “right time” to make a move — buy, sell, or refinance — it’s worth a conversation now, before the rest of the market catches on.

“It’s always about timing. If it’s too soon, no-one understands. If it’s too late, everyone’s forgotten.” Anna Wintour

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business or you may want to move into a more passive real estate investment, such as a triple net or a DSL.. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 45 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.