The discrepancy between offerings and closings also varies by market. In the West and some tertiary regions, for instance, one property trades for every three properties that are put on the market. The differences are even clearer in individual markets, particularly areas that have been hit with a lot of overbuilding and conversion. In Phoenix, for one, only five sales closed between Oct. 1, 2008 and February, accounting for $118 million in volume. At the same time, 42 new communities worth $769 million were put on the block.

They may not be drastically lowering their prices, but multifamily sellers have made some adjustments, bringing cap rates up 30 basis points so far this year. And there are signs that sellers are gradually lowering their expectations in the amount of discount to asking price they're willing to accept. In 2007, the discount stood close to 94%, whereas today, it's below 90%.

"Pressure to sell is on every capital sector, but sellers have been slow to adjust to a rapidly falling market," says RCA. "However, a new breed of sellers--the truly distressed--should help close this gap more quickly."

Primarily made up of capital sources who find themselves the owners of the collateral they lent on, these distressed sellers are dumping an increasing number of assets on the market. Since September, 6% of all multifamily sales have involved distressed situations. There are 1,022 apartment properties worth $10.6 billion in the distressed pool, and that figure is growing by $1.5 billion (120 properties) each month.

"This amount of trouble adds further pressure to a market that is already way out of balance, but an influx of more realistic and distressed sellers may also serve to break the stalemate that has brought sales to a halt," and bring average sales prices down as well, according to the firm.