That's not to say the sector is performing well. Rather, the national average vacancy rate sits at a historic high, climbing 130 basis points over the year to hit 8% at year-end, points out PwC, citing Reis data. Rent cuts and concessions—including an average of three months' free rent, reduced or eliminated deposits and fees and merchandise giveaways—are now common practice in just about every market. The multifamily market, many investors believe, will "bump along the bottom" this year, with conditions changing little.

Like in other property sectors, sales activity has diminished for apartments, but demand is high for well-located, high-quality assets. PwC notes that a 92% occupied, 612-unit property in a good location generated 14 bids during its 21 days on the market, before being sold for $54 million to the Prime Group in a deal that took just two days to close. Another first-quarter deal involved a 254-unit asset near the California State University, which Strata Equity bought for $21.2 million, representing a 7% overall cap rate.

Overall cap rates for apartments have actually fallen over the final three months of last year, ranging from 5% to 11%, with an average of 7.85%, down from 8.03% in the third quarter of 2009. However, the current cap rate was still 97 basis points higher than it was a year ago. The average residual cap rate isn't that far off, coming in at 8.01% this quarter, also an 18-basis-point decline.