{"id":3819,"date":"2023-09-26T17:04:50","date_gmt":"2023-09-26T17:04:50","guid":{"rendered":"https:\/\/www.coastalcapital.com\/?p=3819"},"modified":"2023-09-26T17:07:46","modified_gmt":"2023-09-26T17:07:46","slug":"september-2023-latest-updates-insights","status":"publish","type":"post","link":"https:\/\/www.coastalcapital.com\/september-2023-latest-updates-insights\/","title":{"rendered":"September 2023 Latest Updates & InSights"},"content":{"rendered":"\t\t
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COASTAL CAPITAL INSIGHTS<\/span> <\/h1> <\/div>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Each month Coastal Capital strives to bring you the latest updates and insights into the California real estate market for both investors and brokers.\u00a0 We always welcome new investors who enjoy above-average returns that are not correlated to the equity markets.\u00a0 As always, we appreciate both new investor and broker referrals, as the network builds it brings more value to all through diversification.<\/span><\/p>

Please note that you can add on to your existing investment in any amount.\u00a0 While an initial investment requires an investment of $100,000; existing partners in the Fund can add on in any amount from $2,500 or more.<\/span><\/b><\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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MARKET UPDATE<\/span> <\/h1> <\/div>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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SFR Supply Continues To Dwindle<\/strong><\/span><\/p>

We are starting to sound like a broken record and the chart below shows why. Just when you think the housing inventory shortage can’t get worse, it does! The Association of Realtors just released their August numbers. Overall, in the US inventory levels are down yet again year-over-year (YoY) Nationwide. This has been occurring every year since 2008. Now, in 2023 the number of homes for sale is just 25% of what was available in 2007 & 2008. In the West it is even worse, existing-home sales volume (not prices) slumped 2.6% from the previous month and in August inventory levels are down 15.7% from the prior year.<\/p>

Of course, with less supply and steady demand there is only one direction prices are going to move; and that is up. In the West for August the median price of a single-family residence came in at $609,300, up 1.0% in a year. For California that number hit almost $860,000 up 5% from August 2022! Other data points are confirming the same with Black King Capital reporting that prices were up 2.3% YoY in July hitting all-time highs. Even Freddie Mac is reporting prices were up in July by 2.9% YoY building on a June increase of 1.6%.<\/p>

With mortgage rates surpassing 7% for the first time in over two decades and expected to stay elevated in the coming months we expect the supply issues to continue in both the short- and mid-term. Pending sales, in fact, declined nearly 25% in August, which suggests that closed sales in California will likely slip again in September before possibly bouncing back in October.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Source: Association of Realtors<\/span><\/p>

In the World of commercial real estate office space sees a longer recovery, multifamily is still in high demand and retail continues to rebound. The most recent Allen Matkins\/UCLA Anderson Forecast California Commercial Real Estate Survey, released earlier this year, shows a mixed bag of outlooks that vary based on the type of real estate offered. The findings come as the commercial real estate industry continues to navigate rising interest rates, declining valuations, and economic uncertainty, leading to a contraction in new commercial development across most asset classes. However, there are several signs of light at the end of the tunnel.<\/p>

The biannual survey polls a panel of California\u2019s real estate professionals to project a three-year ahead outlook for commercial real estate and the macroeconomic trends impacting industry participants across the multifamily, office, retail, and industrial markets. The latest survey finds that 29% of Southern California panelists and 20% of Northern California panelists are planning new office developments this year, compared to 48% and 50% in 2022, respectively, when demand was expected to grow alongside supply. However, those expectations did not materialize according to the latest survey, as 2022\u2019s high interest rate environment impacted office market fundamentals.<\/p>

While industrial remains a strong performer in the commercial real estate industry, the latest survey predicts that demand will remain strong but not increase at the elevated rates of the past two years. We will continue to actively solicit brokers for trust deeds secured by industrial properties as we expect good appreciation in this segment through the long-term horizon.<\/p>

Retail remains steadfast on the comeback trail. Following a period of headwinds caused by the pandemic and consumer reliance on e-commerce the signs of recovery in the retail market come down to three key factors that are creating optimism for the sector:<\/p>

\u2022 New housing developments are driving demand for nearby retail options
\u2022 Return to the office, albeit limited, and a growth in tourism leading to retail demand in metropolitan areas
\u2022 The reconfiguration of existing retail establishments adapting to open-air, post-COVID concepts, is attracting new shoppers\/customers<\/p>

Demand of the Fund\u2019s trust deed product offering continues to be extremely strong these past few months big banks & smaller regional banks still have their vaults doors shut to all but prime small-business owners. The lack of traditional financing for them is driving a ton of application flow. Borrowers who are landlords are still snatching up available multi-family properties as soon as they come on the market. With rental rates for housing staying elevated and expected to continue slowly climbing we don\u2019t see this trend ending anytime soon. We do see our existing borrowers struggling to secure new financing. This has led to an uptick in delinquencies and notice of foreclosures being sent out. Thanks to this we expect returns in the fund to also increase as incremental revenue from default interest goes up. We may also get the opportunity to foreclose on a few properties which usually provides tremendous returns & dramatically increases the Fund\u2019s share value.<\/p>

Thank you for all our existing partners who have been referring over friends & family to join us. Please note that our initial minimum investment is $100,000; however existing partners in the Fund can add on in any amount of $2,500 or more.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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PORTFOLIO HIGHLIGHT<\/span> <\/h1> <\/div>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Owner of a Southern California awning company needed some capital to purchase wholesale product at a steep discount. His first stop was his local, regional bank. Of course, they turned him down without perfect credit. The then turned to a broker in San Diego who had assisted before His broker’s challenge was finding a partner that would take the time to evaluate and fund a $60,000 deal.<\/p>

Given the strong equity position in the property we were happy to assist. The process was easy for both the broker and business owner, especially since the loan-to-value ratio was in the low-50 percentile. With such a nice home that showed pride of ownership Coastal Capital was able to close in just four days, highlighting that certainty to close combined with speed often wins us great business.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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