Listings Show Market Aiming to Reprice

[IMGCAP(1)]LOS ANGELES-New listings hitting the local apartment market lately suggest that the market is trying to establish new pricing amid some hints that the bid-ask gap may be narrowing, albeit ever so slightly. Listing brokers for the properties caution that no clear trends are emerging because so few deals are closing. But they say there are sellers who see this as an opportune time to cash out and buyers who are willing to come close to list prices, even though many other buyers are waiting for what they expect will be lower prices later this year.

Dean Zander of Hendricks & Partners, whose new listings include properties ranging from 60 to 112 units at prices of up to $26 million, tells GlobeSt.com that the bid-ask gap appears to be closing. “Sellers understand that they are not in a five-cap environment any more” and are willing to list at prices near the six-plus caps that investors want these days, Zander says.

Greg Harris of the Harris Group at Marcus & Millichap, whose recent listings include complexes from 12 to 80 units at list prices of $1.2 million to $20.25 million, observes that, “The sellers in today’s market have identified that in the short term, values will continue to erode before they appreciate again.” Sellers today “are either trying to lock in their gains or are preemptively attempting to get around their loans coming due,” Harris says.