McLEAN, VA–Multifamily investing conditions grew stronger in the second quarter from the previous one, with some markets such as Seattle and Boston posing increases that exceeded historical averages by large margins. However on an annual basis the investment conditions decreased, according to Freddie Mac's Multifamily Apartment Investment Market Index (AIMI).
AIMI combines multifamily rental income growth, property price growth and mortgage rates to provide a single index that measures multifamily market investment conditions.
The gains in the second quarter were driven by several factors starting with positive net operating income (NOI) growth in all of the major markets that AIMI tracks plus a slight decline in Q2 for mortgage rates. This was an important change for the market — the first quarter had seen a significant increase in rates. Property price growth was mixed across metros, with six markets experiencing a contraction and nine — including the national average — seeing growth. Three cities — Chicago (whose AIMI growth rate was -12.4%), Los Angeles (-8.3%), and Phoenix (-10.0%) — all experienced double-digit growth over the past year.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
