Market Rankings
Q1 2024 Average Cap Rate
Each month we add thousand of data points. For this past quarter, 2 markets had an average cap rate of below 5% while 4 markets were above 8%. Cap rates are in a ping-pong mode with swings affected by raising interest rates, tightening lending requirements and weaker demand. The average was 6.57% for Q4 2023, slightly from 6.52% for Q4 2023.
Q1 2024 Commercial Sales/100k population
Rather that look a just the total number of sales that occur in a market, in order to get a comparable picture, we took the total commercial sales and divided it by the population to get a better picture of what markets are hot and which ones are soft.
Market Summary: Cap Rates up slightly during the 1st quarter 2024
The data indicates an increase of 13 basis point during the 1st quarter 2024. The trend has been up for 9 of the past 10 quarters, although it looks to be stabilizing slightly based upon 1st quarter projections.
Nationwide, total commercial sales volume was down 5.33% from the prior quarter.
In order to get a clearer picture of the metro areas, we ranked the areas by average cap rate and sales volume per population. Combining the rankings gives us a picture of market strength (lower cap rate) and momentum (highest sales volume). Some markets appear to have high quality sales with strong tenants but otherwise a low volume of activity. The combined rankings gives us a slightly better snapshot of the overall market strength.