CONSTRUCTING INDEXES OF THE PRICE OF MULTIFAMILY PROPERTIES USING THE1991 RESIDENTIAL FINANCE SURVEY

Indices of the price of constant-quality, owner-occupied single-family housing are widely available and have been instrumental in learning a bout the operations of the market for owner-occupied housing. Such is not the case for multifamily rental housing. The purpose of this artic le is to provide information about movements in the price of multifami ly properties during the 1980s and early 1990s using the 1991 Resident ial Finance Survey (RFS). Several conclusions are drawn from the devel opment and analysis of indices of the price of multifamily housing for the nation and four large states (California, Florida, New York, and Texas). First, indices for the period 1983-1991 generate similar patte rns among the various methods employed; furthermore, movements in the index during the period 1983-1991 seem reasonable. Second, much region al variation exists. Prices in Texas were particularly hard hit, falli ng by over 25% in nominal terms between 1983 and 1991. Third, the impa ct of the Tax Reform Act of 1986 does not appear to have been as drama tic as some have suggested. Indeed, price declines do not show up in e ither the 1986 or 1987 indices for the nation, California, or New York .