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Multifamily Sales Post Steep Year-Over-Year Decline for H1 2023
Although U.S. multifamily rent growth remained strong in the second quarter of 2023, the same can’t be said for investment sales in the sector, Avison Young reported. Sales volume retreated 70.6% from the all-time highs seen in 2021 and 2022 during the first half of this year.
‘The past 12 months is best described as a market in turmoil,” said Peter Sherman, head of U.S. multifamily at Avison Young. “Spiking interest rates, growing cap rates, softening rents all conspired to bring deal making down to a slow drip, everyone dealing with uncertainty and from an unknowing position of price discovery.
“Today, the rate hikes appear to be largely behind us,” he continued. “There is greater investor clarity, and a new equilibrium is settling in the market.”
Separately, CBRE reported that going-in and exit cap rates for prime multifamily assets were little changed in Q2, leading to a record-low spread between the two. The pause in cap rate expansion mirrors the Federal Reserve pausing interest rate increases in June, said CBRE.
- ◦Sale/Acquisition
