According to CBRE Research and Newmark data, multifamily investments are anticipated to see continued growth and an anticipated full recovery by 2022, with an expected 33% increase in 2021 to $148 billion on a national level. This market segment showed strong resilience during the Covid pandemic, making the fourth quarter of 2020 the strongest on record for the U.S. multifamily market. Investment sales volumes totaled $56.7 billion, up 115.2 percent quarter-over-quarter.
Several trends will be driving this recovery. CBRE Research suggests that one of the trends will be the desire to move from parents’ or friends’ homes to independent living, with low vacancy rates throughout 2021. Fueled by favorable mortgage rates and continued low interest rates, investment in multifamily housing continues to be an excellent investment.
SoCal & Orange County Real Estate Market Outlook
SoCal is forecast to deliver 20,000 new units in 2021 or 1% of total inventory, according to CBRE. The company also forecast that once the vaccine has been distributed, absorption should remain robust, building on strong employment fundamentals and a systemic regional housing shortage.
Multifamily construction projects in Orange County continued to move forward in 2020, with developers breaking ground on 5,872 multifamily projects, including 1,810 units in multifamily construction in the Santa Ana subsector, according to Yardi Matrix data.
Fidelity Bancorp Funding continues to play an important role as a source of financing for multifamily loans with a volume of $545 million in funded loans. “We are anticipating a strong recovery in 2021 in particular in the Southern California market where we serve 90 percent of our investors,” said Fidelity Bancorp Funding VP of Sales Ben Hernandez. In addition, we funded $34 million in bridge loans, which we expect to see increase over the next 12 months. We are very proud that we exceeded our 2020 mission goal and we look forward to working with our investors in 2021.