Multi-Unit Market Update

It has been a while since I ran the numbers on the multi-unit market.  Here is a look at the numbers through the end of 2011:

First, lets look at sales volume.  Clearly we can see that a volume trough occurred in 2009.  That was the most pessimistic year of the multi-unit market.   In contrast, last year put sales volume nearly with par of sales in 2001.  It appears we are improving in sales.  However, to understand what is driving the market, lets take a look at sales according the the financing style of each transaction:

This chart is intriguing.  A whopping 44% of ALL transactions are done in cash.  That is up from 35% last year.  That speaks of a tremendous amount of distress still in the market in 2011.  Notably, seller finance and FHA/VA transactions were on the decline as a proportion of sales.  Also, conventional transactions seemed to be increasing though not significantly.

Overall, I believe 2012 will be a transition year.  Look for conventional financing to improve and the number of cash transactions to decrease from where they were in 2011.  If those two things occur, it will be the mark of an improving investment property market.  Nevertheless, those that are buying right now are making a killing in return-on-investment. 

If you want to explore purchasing a great bargain on multi-unit property, contact me and we can put a plan together that is right for you.