The Year In Review: Multi-Family Properties In 2012
Part 3 in our three-part series will take a look at the sale of Multi-Family properties in 2012. We will define “multi-family” as legal 2- and 3-family dwellings. Currently there are 63 properties for sale. The average listing price is $120,500 and the average time on the market is 212 days.
In 2012, a total of 105 Multi-Family properties sold. The average sales price was $82,900, fetching about 93% of list price. It took an average of 163 days to sell. Compare this to the benchmark years of 2005 & 2006. In 2005 there were a total of 129 sales, with an average sales price of $145,700. Market time was about 100 days. In 2006 the total number of sales dropped to 119, with an average sales price of $141,300. Average market time was still about 100 days to sell.
By 2007 the number of sales dropped below 100 units, and the average sales price plummeted to an average of $114,000. The Multi-Family market took another hit in 2008 with the average sales pricing dropping to $86,500. Multi-Family properties hit bottom in 2009. Although the number of sales once again broke 100 units (115), the average sales price dropped again, to $75,300.
Multi-Family properties have begun the long, slow road to recovery. Sales have averaged about 100 units each of the past 3 years, and the average sales price has been fairly flat, maintaining in the low $80s. Since January 1st of this year there have been 13 sales, with an average sales price of $84,000 and an average market time of 70 days. There are currently 15 properties under contract, with an average list price of $106,000.
One trend to watch moving forward….although there are quite a few investors in the marketplace, it appears that there are more first-time buyers looking at a multi-family property as their first purchase. Conservative buyers are weighing the benefits of off-setting their mortgage with rental income from the second or third unit. Qualifying buyers, and properties, can also take advantage of the Lakewood HOME Program which provides a second mortgage loan with 0% interest and deferred payment/forgiveness options. Details on the program are available by contacting the Division of Community Development at Lakewood City Hall. Property owners can track neighborhood activity and sales at www.HomeValuesInLakewood.Info. A full copy of the 2012 report can be obtained by emailing Chris@ChrisBerign.com.
Chris Bergin is a licensed real estate agent with Prudential Lucien Realty in Lakewood.