I typically buy mid-sized multi-family properties (20-100 units) in the stable suburbs of a large east coast city. I’ve been doing this for 20 years and slowly accumulating long term holds. My last purchase of 30 units was May 2022 (prob the top of the market) with 10 year fixed debt, so I think that one will be fine. Since then, I’ve sat out as a buyer.

Around that time, the local multifamily for-sale market froze. There were no sellers, no buyers, no lenders, no action. Everyone has been in a holding pattern, desperately trying not to buy or sell at the wrong time.

Over the last month or two, I’ve started to hear from sellers again who are feeling out the market. They realize they missed the seller’s market but want to exit for decent prices before the bottom falls out further. Sorry, but it’s too late. There have been no takers at the prices that have been floated out. There’s is a big spread between bid and ask and buyers are waiting for the inevitable further price drops.

Guys like me will be buyers during this down cycle - I purchased several distressed buildings in the late 2000’s. But not yet. Prices haven’t fallen enough to offset the higher cost of debt and softer economic projections. Once debt maturities put real pressure on sellers, that’s when the buyers will start to pay attention again. There needs to be a lot more seller pain before I’m a buyer.

For now, I’m keeping an eye on costs, watching my capex, paying down debt in the ordinary course, and waiting. I won’t be the first to buy on the way down. In this kind of cycle, it’s better to buy a little too late than too early.