The U.S. multifamily market has demonstrated impressive investment performance in the first half of 2022, according to data from Yardi Matrix. With a total national sales volume exceeding $101 billion during this period, surpassing the $67 billion registered in 2021, it is clear that the multifamily sector is thriving. Additionally, the average price per unit has seen a significant 28.4% year-over-year increase, reaching a new high of $218,377. Moreover, the number of properties traded has also witnessed growth, with 2,961 transactions in 2022 compared to 2,362 in 2021.
The Top 10 Multifamily Markets by Sales Volume
In this ranking, we explore the top 10 markets based on multifamily investment volume. These markets collectively contribute approximately $48 billion, accounting for nearly half of the national sales activity. Notably, the list includes the resurgence of gateway markets New York and Los Angeles, replacing Tampa and Raleigh from the previous year's ranking.
| Metro | Sales Volume $ H1 2022 | Price Per Unit H1 2022 | PPU Evolution YoY | Units Sold H1 2022 |
|---|
1. Phoenix Phoenix stands out as one of the first markets to recover all jobs lost during the pandemic, entering an expansion phase in late 2021. Multifamily investment volume in the first half of 2022 reached $7.4 billion, a substantial increase from $5.1 billion in the same period last year. Although investor activity progressively increased quarter by quarter in 2021, this trend may reverse due to the current economic challenges. The metro saw 127 properties (24,787 units) change hands in this period, slightly higher than the previous year.
The average price per unit in Phoenix experienced the largest year-over-year increase among all metros in this ranking, rising by 58.3% to $339,622. The per-unit price for upscale apartments stood at $472,452 in June, while working-class units rose to $289,057. The sales composition was mainly driven by investor competition, with 14,735 Renter-by-Necessity (RBN) units and 10,052 Lifestyle units being sold. In 2021, Phoenix recorded a total multifamily sales volume of $14 billion, ranking it third among major metros in the country.
2. Atlanta Atlanta's balanced economy has propelled its expansion and attracted investors to its multifamily market. Multifamily investment volume reached $7 billion in the first half of 2022, surpassing the $5.1 billion recorded in the same period last year. Similar to Phoenix, investor activity increased progressively throughout 2021, peaking at $6.5 billion in the final quarter. However, rising interest rates may dampen investment in the future. Through June, 156 properties (39,113 units) were traded, slightly higher than the previous year.
The average price per unit in Atlanta rose by 27% year-over-year through June, with an average of $204,312. Although this growth rate is solid, it is overshadowed by the performance of Phoenix, Orlando, and Miami. By asset class, rent growth favored Lifestyle units, with prices increasing by 15.5% to $267,820 per unit, while RBN prices rose by 10.1% to $161,062 per unit. Investors showed a preference for upscale assets, contributing to the increase in the average per-unit price. Atlanta recorded an investment volume of $14.5 billion in 2021, making it the second-highest among major markets in the U.S.
3. Dallas As last year's leading metro with $14.6 billion in multifamily sales, Dallas continued to grow due to strong in-migration, company relocations, and expansions. The multifamily sales volume reached nearly $6.6 billion through June 2022, outperforming the $5.2 billion volume recorded in the same period last year. Transaction activity has been more intense, with 284 properties (64,213 units) changing hands, compared to 185 properties (49,544 units) in the first half of 2021.
The average price per unit in Dallas is the second-lowest in this ranking, standing at $186,049. However, the metro remains in the relatively affordable market range, trailing behind the national average. On a year-over-year basis, the rate rose by 22.7%. By asset class, the per-unit price for Lifestyle units increased by 10.4% to $243,480, while RBN units rose by 7.8% to $159,882. Investors showed a preference for value-add plays, with 33,693 RBN units and 30,520 Lifestyle units being traded.
4. Houston Another Texas market in this ranking, Houston, saw $6.4 billion in multifamily trades during the first half of 2022, maintaining its position from last year when it closed with $11.1 billion in transactions. Compared to the same period last year, Houston experienced substantial growth, with just $2.6 billion in multifamily assets changing hands. Through June, 221 properties (56,895 units) were traded, well above the 126 properties (30,245 units) from the previous year.
The average price per unit in Houston increased by 25.6% year-over-year through June, reaching $155,780. This is the lowest rate among all markets in this ranking and significantly below the national average. Strong demand for RBN apartments contributed to the rate increase, with RBN units priced at $126,473 in June, while Lifestyle units saw a modest rise to $127,692. The sales composition was led by Lifestyle assets, with 32,428 units, followed by the RBN segment with 24,467 units.
5. New York Making its debut in this ranking, New York's multifamily sales volume rose to $4 billion. This market exhibited an impressive performance compared to the same period last year, with just $933 million in multifamily assets traded. Through June, 29 assets (7,524 units) changed hands, while in the previous year, only 12 properties (1,605 units) were sold.
New York is the only metro in this ranking that registered a decline in per-unit prices, down by 7.8% year-over-year through June. Despite this decrease, the market remains the most expensive, with an average price per unit of $642,482. The sustained economic recovery and the return of residents have strengthened housing demand. The average price per Lifestyle unit rose by 4.2% from the first quarter to $811,132 in June, while the per-unit price for RBN units increased significantly by 63% on a trailing three-month basis to $326,730. Demand for upscale assets was higher, with 4,511 Lifestyle units and 3,013 RBN units being sold.
6. Orlando Climbing two positions from last year's ranking, Orlando achieved a total sales volume of $3.8 billion through June. This is a significant increase compared to the $2 billion traded in the same period last year. Specifically, 54 properties (16,222 units) were traded, surpassing the 50 properties (12,812 units) from the first half of 2021.
Investors heavily targeted luxury assets, with 10,724 Lifestyle units and 5,498 RBN units being sold. This contributed to a per-unit price gain of 32.6% year-over-year through June, reaching $253,975. The average price per Lifestyle unit stood at $313,586 in June, while RBN units were priced at $172,882.
