We spend a lot of time talking about single-family homes and condominiums, but multi-family properties are another important part of the local housing scene.
Where are the the multi-families in Hartford County? As you can see by the number of contracts written on this type of property over the past two years, they are concentrated in just a few towns. Lots in Hartford and New Britain, and a solid number in Bristol, Manchester, and East Hartford. Beyond that you have to really keep a close eye on the market or the opportunities will sneak past.
The overall number of contracts in 2010 was actually up slightly versus 2009, which is a big difference from what we saw in the single-family and condo markets. Even more interesting, there was a slight decrease in activity in the two biggest markets, but nearly all the other towns added just a couple deals and made up the difference.
Inventory is on the high side for the towns with lots of multi-family housing stock. This is partially related to the higher rate of financial distress than with other types of properties. Many investor-owners felt the pain of the housing crisis first (uh oh, prices aren’t going to continue rising) and gave up their multis early in the game – sometimes it was voluntary, other times not. Either way, the distressed sales have increased the available inventory and pushed prices down for everyone, even quality properties.
Our main observation is that even with the bloated inventory, the best multi-families sell quickly. There are financially strong investors out there looking to add to their portfolios, and the cap rates are much more attractive now that prices have fallen. Buyers on the hunt for a top-quality multi need to (1) have their financing in order, (2) have an automatic MLS search set up to get the new listings ASAP, (3) have a flexible enough schedule that they can visit the home the first day or two, and (4) be comfortable making quick evaluations/decisions. The good stuff sells very quickly if it is priced right.