The price-per-unit for multifamily properties surged 156 percent over the past decade, reaching nearly $160,000 per apartment, surpassing both median home-sale prices and rental rates, according to the latest study from Commercial Search.
“Never have we spent so much time in our homes. Median prices are at their highest level in generations,” the company writes in a release.
“A supply shortage and interest rates that are on the floor — and likely to stay there for some time — mean prices continue to rise. The national median home-sale price is up roughly 58 percent since 2009 to $313,200. In the last decade, as prices rose, home ownership rates slowly declined. In 2016, the homeownership rate in the U.S. was 62.9 percent, the lowest level since 1965. Four years later, the homeownership rate neared its peak reached before the housing crisis, 67.9 percent, with much of the uptick being driven by cheap borrowing costs. However, the pandemic has caused rates to fall back to 65.8 percent as of Q4 2020.”
Some key points from the study
- Since 2009, there have been more than $912 billion in multifamily sales.
- Dallas-Fort Worth was the hottest market for multifamily deals over the past decade, with 2,227 deals completed during this period. It was followed by Atlanta and New York City with 2,134 and 1,791 deals, respectively.
- In 2020, DFW closed 146 deals and Atlanta closed 132. New York City fell out of the top, with only 26 deals closed last year. Phoenix came in third with 125 deals.
- Both NYC and Atlanta saw more than $50 billion in multifamily sales since 2009.
- Multifamily prices in New York City grew 425 percent in the past 10 years, resting at $437,511 per unit in 2020.
- In San Francisco, the most expensive market, the price-per-unit dipped to $493,041 last year. In 2019, this price was 338 percent higher than in 2009.