Under Contract
74 Porter Place,
Montclair Twp, NJ 07042-2036

Multi Family Market Analysis

Some similarities and Some Differences

The Montclair 2-4 family market has shared the steady price increases that we’ve seen among single family homes (fig.1). Volume has trended downward (fig.3), but not precipitously, with a dip and spike around covid. Therefore we can’t really attribute the increase in prices to lower supply.

Figure 1

Price premiums have crept up (fig.4), but not nearly the way the single family market has. Multi family pricing, at it’s core, is income driven and are priced accordingly, with fewer emotional bidding wars.

Figure 2

Certainly rents have increased, from an average of $1,889 in 2016 to $3,075 in 2025 (fig.2), but that doesn’t fully explain price appreciation, especially as expenses (taxes!) have increased along with rents.

Figure 3

One of the driving forces has been a lower capitalization rate (cap rate) on properties as more multis are being bought by owner occupiers due to lower single family supply and as a way to offset taxes. Cap rates on multis have dropped from the 6-7% range to around 5%, and as low as 4% for the right home. A lower cap rate essentially means that owner occupiers generally require a lower return on their investment and are, therefore, willing to pay more for a multi than an investor.

Figure 4

Despite increases in multi family pricing, there are still opportunities for investors out there, especially those willing to renovate.

Best, Rich