Are multifamily sales cooling off?

For the under 100 unit transactions, other than Orlando the results are also very obvious the market has cooled off in terms of number of deals done. The price per unit was still up across the board, except in Gainesville. In looking at Gainesville a little closer within the data (not pictured here), 4 of the 6 sales happened to be lower end C to C- deals that are atypical for the market and brought the price per unit median down a bit. All other markets were up a minimum of 15% in pricing per unit. Cumulatively across the six markets 2019 is down 38% in the number of deals from 2018. Jacksonville was down the most number of deals with an 83% drop.

What does this mean? Nothing alarming I don’t think. My explanation is that since January 2015 there have been 947 total sales of any apartment complex over 10 units across all 6 markets combined. There are roughly 3,200 total properties. This means that nearly 30% of all the properties have sold in the last 4.5 years. Some of those properties sold several times. That’s just under 7% of the inventory per year. Yes, there are still over 2,100 properties that haven’t sold in the last 4.5 years, we have to expect a vast majority of those deals are long term holds, or tied up in estate issues, or still within their loan term with defeasance, or some other host of other reasons why they haven’t traded yet. My point is, selling nearly 1,000 properties in under 5 years in just 6 markets in central and north Florida is a lot and we can’t all expect the pace to continue. Price per unit continues to increase, our economy is healthy, and interest rates are still ridiculously low. My bold prediction is to see pricing per unit ease up a bit by 2021.