“Given the unusual burst of year-end sales that accompanied an eventual rise in capital gains taxes, we do not consider the quarter-over-quarter decline to be a major indicator of the multifamily sector's overall health,” Shkury says in the announcement. “In fact, current contracts support an uptick in institutional sales in the second and third quarters of 2013.”

More specifically, Manhattan was the borough that posted the strongest dollar volume, with $521.909 million in sales, but that was a drop from $1.325 billion in the first quarter of 2012. Most of this decline stemmed from fewer institutional sales taking place last year, according to the report. Several pricing metrics in the report suggest that multifamily values are up by more than 20 percent year-over -year.

Northern Manhattan was the only area to post year-over-year gains in sales across the board, Ariel asserts. Compared to the first quarter of 2012, transaction volume increased 16 percent while building volume and dollar volume both increased by more than 60 percent. Much of this increase can be attributed to portfolio sales, the firm concludes in the report.

Meanwhile, Brooklyn was the most active in Q1 transactions, with 34 sales taking place. Few institutional size deals took place, with most closing prices being under $10 million. Over in the Bronx, transaction volume nearly held steady with just a 4% decline. Building volume was down by 13 % but dollar volume showed a slight 1% increase, states the report. Single building sales defined the first quarter in Queens, with this trend toward smaller deals prompting a decline in both building and dollar volume. However, several transactions hit the market or went into contract last quarter, so Ariel expects 2013 to be a very positive year for Queens multifamily building sales.

The multifamily transactions included in Ariel Properties' analysis occurred at a minimum sales price of $1 million, with a minimum gross area of 5,000 square feet, and with a minimum of 10 units.