Apartment vacancies are falling, multifamily sales remain low

The real estate research firm Reis Inc, recently reported a 3rd quarter apartment vacancy rate of 7.2%, down from 7.8% the prior quarter. 

The demand for rental housing is increasing, while investor demand for multifamily ownership is not. Dane County multifamily sales have stagnated at historically low levels, as the two graphs below show.

One reason multifamily sales have stagnated is the amount of cash required to purchase an income property. Many lenders require 20% to 30% down, which acts as a barrier to entry for many of today's would-be investors.

For those investors who can muster the cash, the prospects are very good. Interest rates are low; many sellers are motivated; and rental housing vacancy rates are decreasing.

You'll find our latest report on the Dane County multifamily market on the economic trends page DaneCountyMarket.com.

Dan Miller, Realtor, Keller Williams Realty and www.DaneCountyMarket.com