"The apartment market is very interesting now," Colin Whittier,VP of KeyBank Real Estate Capital tells GlobeSt.com. "A lot oflenders are very busy doing agency deals and these are still goingstrong. But when you look at more recent data you see that some ofit is a little scary."

Namely, he says, there is a danger that oversupply could erodeprojected cash flow in some deals if vacancies start to rise andrents fall. "Builders are still developing (multifamily projects)as quickly as they can," Whittier says. Transparency into vacancyrates may not be as clear as some expect either, he adds, as theshadow market becomes more active in the downturn.

Whittier says the trend is so new it is difficult to quantify –and of course, there are always variations of this larger trend inthe individual submarkets. "But I would say that in the last threeto six months, rents have been decreasing and vacanciesincreasing," he says. Another worrisome sign—the market expected tosee multifamily cap rates start to rise, but that hasn't happenedyet to any significant degree, he says.