4 properties sold for a total consideration of $16.88M during May ‘23. The median price per unit of these transactions was $356k and the average CAP rate was 3.93%, up from 3.91% in April ‘23. The notable sale of the month was the sale of 360 California Ave a 24 unit property acquired by the City & County of Honolulu for $6.0M or $250k per unit. The project will be designated to serve low to moderate income households. Download the market comps below!
Where are we in the real estate market cycle? According to Mueller’s market cycle quadrant below, we’re in Phase 3 - Hyper Supply. On the inventory side of the equation, there are currently 42 opportunities (5+ units) actively listed on the market. The total value of the opportunities is $151.6M. The average days on market is 116 days, up from 99 days last month. The average CAP rate of these properties at list price is 3.59%.
With the Fed still combating inflation and intentionally stunting growth, we will continue to see downward pressure on valuations. During the Fed’s meeting in June ’23, they decided not to lift rates for the first time in 11 meetings, leaving its target interest rate at a range of 5.00% – 5.25%, but also signaled that future hikes are imminent.
Multifamily In the News:
Here are links to several articles relating to the multifamily and affordable housing sectors in Hawaii.
$253M in affordable housing funding to lapse.
July events to be held for first-time applicants for Oahu rent and utility relief.
Hawaii Housing Authority seeks 10,880 more affordable units
A new purpose for an old building site.
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