Multifamily Prices Soar 156% Over Past Decade
Multifamily prices rose 156% in 10 years, or an average of 15.6% per year from 2010-2020. The per unit price for multifamily properties has reached nearly $160,000. According to a new study from CommercialSearch. This increase surpasses median home sales prices, which rose 58% over the past decade, and rental rates, which experienced a 37% boost.
According to the study, which used Yardi Matrix and PropertyShark data for transactions between Jan. 1, 2009, and Dec. 31, 2020, the nation has seen more than $912 billion in multifamily deals in the last decade. In 2009, multifamily deals registered $13.4 billion, while nearly $130 billion in multifamily sales closed in 2019 and more than $82 billion closed last year.
Dallas-Fort Worth was ranked as the hottest market for multifamily deals over the past decade, with 2,227 transactions totaling 516,693 units completed during this time.
At EM Capital we believe this increase is due to three main factors: increased monetary supply following the Great Recession causing asset inflation, continued shortage middle income and low income housing across the country, and favorable financing in the multifamily sector driven by low interest rates, and strong agency debt support. We don’t see any of these factors reversing in the near future and remain bullish on multifamily investing.
Source: Mulitfamily Executive