Investors have shown a renewed outlook on the multifamily market in California. The winter commercial real estate survey from Allen Matkins and UCLA Anderson Forecast shows improved multifamily sentiment in most California markets compared to the mid-year survey in June.

"There is a little bit of a dichotomy in the multifamily market. Early in the pandemic, there was a movement out of dense urban markets for some people, and there was no demand. Therefore, prices fell," John Tipton, a partner at Allen Matkins, tells GlobeSt.com.

The improved sentiment was a surprise considering that California's major metros have continued to suffer from declining fundamentals. "The key thing to consider is that our survey looks three years out," explains Tipton. "We are asking how investors view the world for a 2023 start. The reality is that most people are thinking that in 2023, the pandemic is behind us and we will return to normal supply-and-demand criteria. including job growth, inward migration, real estate pricing. All of those things will be positive for multifamily housing."