Patch Imperial Beach, CA --For investors shopping for apartment complexes, surf’s up in Imperial Beach this year—where nearly 70 percent of households are renters.
A 31-unit complex at 1445 Grove Ave. sold Feb. 25 for $3.6 million—the largest deal of the year.
Five of the six complexes of 5-10 units that changed hands in the past year were sold after Jan. 1.
"Right now there’s money on the streets,” said Clay Madisen, a broker for Leadingham Realty on Palm Avenue about the recent surge. "It’s a little unusual for that many to sell, but I expect to see more of it in the future."
Madisen said people are looking for income properties and "right now investors aren’t getting anything on the money from the banks, so they’re putting it into real estate."
Among rental properties of 10 or more units in the past 12 months, three of four were sold since February, according to Sandicor data.
The majority of recent apartment complex sales have occurred in the Oneonta and Bayside neighborhoods in north and southeast Imperial Beach.
Sales this month include an eight-unit complex at 1001-1015 Calla Ave. for $1.18 million and an eight-unit complex at 983-997 Donax Ave. for $1.23 million in April.
Fewer apartments are available to rent and prices for some units have gone up, a survey by the San Diego County Apartment Association stated.
Vacancy rates in Imperial Beach fell from 5.7 percent in fall 2011 to 2.4 percent in fall 2012, the survey said.
Imperial Beach Average Monthly Rent
Fall 2012 Spring 2012 Fall 2011
Studio $620 $705 $613
1 bedroom $903 $864 $820
2 bedroom $1,042 $1,059 $1,088
3+ bedroom $1,499 $1,224 $1,230
Studio, one-bedroom and three or more bedroom units all saw increases in average monthly rent from fall 2011 to fall 2012. Two-bedroom apartments, which according to the city make up 40 percent of units in IB, saw a slight decline in monthly rent rates over the same time period.
Average monthly rates for renters in Imperial Beach are comparable to cities like Lemon Grove and National City and below most other parts of the county.
"I’d say it’s a seller’s market because there isn’t a whole lot of product for sale," said Hunter Combs, a broker with Cassidy Turley San Diego. "Owners are in a very strong position, so if there’s interest in a sale, this is a great time to do it."
In its March 2013 look at the local real estate economy, MarketPointe Realty Advisors said the San Diego County rental market “continues to show strength as average rent rates marched upward and vacancies tighten.”
Rental rates have risen steadily from $1,314 in March 2010 to $1,388 in March 2013. Vacancy rates for San Diego County have fluctuated but have declined from 4.74 percent in March 2010 to 4.71 percent in March 2013.
As a region, South County had a vacancy rate of 4.22 percent in March 2013, lower than any other part of the county except East County, with a 3.13 percent rate.
One sign that the market is growing strong is renters in South County and other parts of San Diego are seeing fewer incentives like a month’s free rent than they did a few years ago, Combs said.
“I think just the continued strength of the rental market and with the readily available financing, there’s a push towards a strong market for buyers and sellers, and sellers have the upper hand because they’ve got the asset,” he said.
Many of the apartment complex buyers regularly invest in South County, Combs said, including Charles Kreutzkamp, whose trust owns Imperial Villa Properties and hundreds of units in South County. Reported by Patch 6 days ago.