House prices are still tanking in many parts of the country, mortgage rates are inching up, and job growth is subpar. So what are some homebuyers doing? They’re buying even more home—as in two-, three- and four-family homes—and playing a risky, but potentially lucrative, game of real estate investor and live-in landlord at the same time.
While the National Association of Realtors doesn’t have a detailed breakdown of sales of multifamily homes, there’s telling local data. In parts of New York, multifamily sales were up 26 percent in the third quarter of 2010, compared with the year-earlier period. And in Chicago’s popular Lakeview and North Center neighborhoods, the growth was even more dramatic—a 77 percent multifamily uptick midway through 2010. Individual real estate agents are likewise seeing a spike. Michael Reiser of Coldwell Banker Gundaker in St. Louis says his multifamily business has doubled in the past year. "I am working with more buyers than I ever have before," the veteran agent says.