CoStar reported that its value-weighted index of multifamily property prices rose 1.4 percent month-over-month in December, slightly lower than last month’s reported increase. This index was down 2.8 percent year-over-year.
By contrast, MSCI Real Capital Analytics reported earlier that multifamily property prices were unchanged for the month and down 4.2 percent year-over-year in December.
The value-weighted index of non-multifamily commercial property fell 1.5 percent month-over-month in December. This index is down 4.0 percent year-over-year. The other commercial property types tracked by CoStar are office, retail, industrial and hospitality.
For more information on the CoStar Commercial Repeat Sales Indexes (CCRSI’s), please see the description at the bottom of this report.
Multifamily property prices in upward trend
The first chart, below, shows the history of the value-weighted CCRSI’s since January 2016 for multifamily property and for all other commercial property considered as a single asset class. It also shows trend lines for the growth in the two CCRSI’s based on their growth in the period from January 2012 to January 2020. The indexes are normalized so that their values in December 2000 are set to 100.
The chart shows that multifamily property prices have been rising since September and are now effectively at the same level as they were in January. However, multifamily property prices are down 25.9 percent from the high they reached in July 2022. They are also 13.7 percent below their pre-pandemic trend.
Prices for other commercial property types fell again this month. They have been moving up and down in a narrow range all 2025. These prices are now 13.8 percent below their high point and 18.0 percent below their pre-pandemic trend.
The second chart shows the recent history of multifamily property prices and other commercial property prices based on this month’s data along with the estimates from last month. For purposes of this chart, the price indexes for both property groupings were set to a value of 100 in January 2020 so that the indexes could be plotted together at a scale that would show the detailed price movements.
The chart shows that new transactions added to the data sets made only slight changes to last month’s multifamily index values but more significant changes to the pricing data for other commercial property. While the new data changed the magnitude of the reported pricing changes, it did not change their direction.
Midwest is best
CoStar’s quarterly reports include information on changes in the equal-weighted CCRSI by property type by region. The history since Q1 2012 of these regional indexes for multifamily property is shown in the next chart, below. For purposes of this chart, the CCRSI’s for each of the four regions was normalized to a value of 100 in Q1 2012.
The chart shows that the multifamily property prices in the South and West regions have been trending lower since reaching peaks in late 2021, although prices in the West ticked up this quarter. Prices are off 22.8 percent in the West and 11.2 percent in the South from their peak. Multifamily property prices in the Northeast have been relatively stagnant and are now at the same level as in Q4 2021. Prices in the Midwest have been trending higher since late last year.
On a quarter-over-quarter basis, multifamily property prices in Q4 2024 were down in the Northeast and South but up in the Midwest and West. Prices fell 2.3 percent in the Northeast, and 0.3 percent in the South. Prices rose 1.5 percent in the Midwest and 2.3 percent in the West.
The next chart shows the history of the year-over-year regional multifamily property price changes by quarter since 2016. The chart shows that the Midwest has been the best performer on a year-over-year basis for the last 3 quarters.
Based on CoStar’s equal-weighted quarterly indexes and compared to year-earlier levels, prices in Q4 2024 were up by 6.1 percent in the Midwest. However, prices fell 4.3 percent in the Northeast, 3.9 percent in the South and 6.7 percent in the West.
Transaction volumes surge
An issue with monthly transaction volume reporting is that CoStar usually identifies additional transactions to tabulate over the next few months after the initial report, and these extra transactions tend to make initial reports of rising transaction volumes appear less positive than they will subsequently appear. For example, CoStar reported that the transaction volume in December was up 29.3 percent from the revised level of the month before, but it was up 48.8 percent from the preliminary level for November reported last month.
CoStar reported that their initial transaction count for December was 1,710 repeat sales pairs. This is up from the 1,149 transaction pairs identified for November in last month’s report and also up from the 1,322 transaction pairs identified for November in this month’s report.
The history of the revisions to the transaction counts for recent months is illustrated in the next chart. It shows that the number of transactions for July was initially given as 1,222 in the August report and has been revised in every subsequent report. While the size of the transaction count revision was largest in the next month’s report, additional transaction pairs for July continued to be identified in every subsequent report. The current report identifies 1,454 transactions for July. By contrast, transaction data for December only appears in the current (January) report and we can expect it to be revised next month.
The preliminary dollar volume of transactions was reported to Jump 44.2 percent from the revised level of the month before to $14.60 billion. The dollar volume of transactions increased 56.1 percent from the preliminary level reported last month.
The full report discusses all commercial property types. While the CoStar report provides information on transaction volumes, it does not break out multifamily transactions. The latest CoStar report can be found here.
CCRSI defined
The CoStar report focuses on a relative measure of property prices called the CoStar Commercial Repeat Sales Index (CCRSI). The index is computed based on the resale of properties whose earlier sales prices and sales dates are known. The index represents the relative change in the price of property over time rather than its absolute price. CoStar identified 1,710 repeat sale pairs in December for all property types. These sales pairs were used to calculate the results quoted here.
CoStar computes CCRSI’s for a variety of property groupings, combining them by cost, region, property type or other factors. The value-weighted index is more heavily influenced by transactions of expensive properties than is CoStar’s equal-weighted index. The value-weighted index is the focus of this report because it is an index whose value is reported monthly and for which CoStar breaks out multifamily property as a separate category.
