Over the last year there have been quite a few changes in the small multifamily market. It’s also interesting that the bottom, seemingly, per unit was hit around the same time as the single family home market: April/May 2009.
While the average price per unit gone up much, it does look as if the price is fairly steady and maybe trending up, up ever so slowly and that’s good for now.
The average price is now around $24,000 per unit and it’s been hovering from $22,000 to $27,000 over the past 6 months.
What’s really changed are the total number of units being sold. The small multifamily market also follows the seasonal trends of single family homes, that’s why you see the summer high. Look at the number of units sold for the same period in 2010 to 2009 an notice the very huge difference.
An now with 96 pending properties and 87 in AWC mode the forecast for sales looks very strong in deed and we may even get an up tick in the average price per unit with such a low inventory of active properties compared to the demand. As of May 12th there were 272 3-4 unit properties active with 62 of those short sales and 31 lender owned.
All the good stuff is going fairly fast and much of what’s for sale is the same stuff that was on the market half a year ago and even a year ago, so not really part of the game.
With the current sales pace there is only a 4.5 month supply of properties and if you remove the over-priced stuff it’s more like 3-3.5 months of supply pegging it squarely in the sellers market. A seller’s market indeed, but as you know investors are fairly savvy and in this market every one is looking for a deal so sellers can’t really push up the price.
In order to get the better properties, investors are advised to have cash if possible and act quickly. Don’t expect much more inventory, distressed inventory that is, to show up on the market anytime soon. We’ll have a steady trickle but no major floods.
If you would like to discuss this in more detail please call me, Artur at 602.628.4349
