With prices peaking and buyers aplenty, seven years after the top of the last upturn, the time may be right again to sell.
Here’s an interesting article every multifamily owner should read and read close:
The larger investment companies and many REIT’s are selling multi-family apartments as they cannot justify 4% CAP rates with 6% interest rates.
If buyers eventually balk at those decreasing returns, sellers might have to make price adjustments. Overdevelopment could eventually add more supply to the market, also forcing sellers to adjust.
Reasons to Be Optimistic
Just because it seems like cap rates can’t go down any farther, and many formerly favorable markets will be flooded with supply, that doesn’t mean everyone wants to sell.