July 2024 Market Data
In July 2024, five properties traded for a total volume of $24.19M accounting for 44.5% of the year-to-date volume. The median $/ unit was $293K with a high and low of $350k and $258k respectively. The median cap rate of these deals was 4.74%.
The notable sale of the month was 3206 Ala Ilima St. a 30-unit property which traded at 3.64% cap rate. The asset was originally listed at $13M and traded for 76.92% of the list price at $9.99M.
Download Sales Comps Below
Inventory Snapshot
On the supply side of the equation, there are 40 properties listed on the market for a total consideration of $158M. The median days on market (DOM) is up to 160 days as it is still challenging to get deals to pencil for investors. The median Cap rate of deals listed is 3.92% which indicates an 82 basis point spread between where deals are trading and where deals are listed.
Macro Economy
In August 2024, the consumer price index rose 2.5% on an annual basis. Inflation has gradually declined over the past several months, but certain sectors such as housing remain relatively high. The CPI inflation reading is the lowest since February 2021. As of this writing, the risk-free rate of return commonly measured by 10-year Treasury is yielding 3.678%. The Federal Reserve is expected to start cutting interest rates at its September meeting, since inflation has throttled back. The question is: How much does the FED slash rates by? Let us know what you think by voting in our poll!
Asset Management Tip – Methods to Increase Income
As operating expenses continue to rise, multifamily owners must be creative in generating more income at the property level to offset these costs. Here are several methods to increase income at your property.
Pet Rent
Tenants will jump over the moon for their furry companions, it is wise for owners to allow pets and collect not only pet rent, but also additional deposits.
Laundry Facilities
Coin-operated or card-based facilities can generate anywhere from $250 - $500/ month per machine.
Late Payment Fees
Be sure that you have the right to impose late fees on delinquent payments. In Hawaii, this amount can’t exceed 8% of the total rent due.
Storage Units
Create storage lockers that can be leased by the tenants. Many tenants have large or bulky items that they would gladly pay for additional storage.
Parking Fees
As parking is considered a luxury here in Hawaii, owners should be charging anywhere from $25-$100/month in parking
View more of our Insights on our Website!
If you’re interested in discussing your investment strategy and your goals for the remainder of 2024, let’s schedule a time to meet!
Multifamily In the News
New Honolulu Law Aims to spur Affordable Rental Construction
Latest Affordable Housing Rentals Ready for Move-in on Kinau St.
State Eyes Takeover of Struggling Affordable Project in Kakaako
Networking Events
CCIM 2024 Golf Tournament
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September is always a special month, as we celebrate our son Colby, he turned 2 this past week!
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