NEW YORK CITY-Investment sales activity has taken a bit of an upswing lately. Overall commercial sales posted their highest volume so far this year in the third quarter, at $12.5 billion, according to the latest data from Real Capital Analytics. While it still isn’t as much as was racked up a year ago, the third quarter’s figure was still 24% more than the sales volume achieved in Q2, despite a 12% decrease in the number of properties on the market.

For apartment sales specifically, the third quarter saw $3.6 billion worth of properties change hands, a 12% increase over the prior three-month period and the second consecutive quarterly increase since the credit crash last year. Also telling is that the number of properties trading above the $40-million mark between July and September was about the same amount that was sold during the entire first half of the year. Still, say RCA analysts, these positive developments don’t necessarily mean a recovery is under way; in fact, it’s more likely that a significant rebound in investment activity is still some time to come.

Compared to last year, sales volume in the third quarter is down 64% over the prior year and 85% from two years ago. On a regional level, many markets had only one significant sale during those three months, and some, such as Baltimore and Indianapolis, had none altogether. Other, one-hot markets, including Las Vegas, Jacksonville, FL and Ft. Lauderdale, FL, have each seen less than $50 million worth of multifamily properties trade all year.

Meanwhile, the distressed situation isn’t turning out to be the boon it was once expected to. Distressed sales only accounted for 14% of the overall sales volume in September, a smidgen more than the first half of the year. And apartment properties entering default, foreclosure or bankruptcy slowed to $3.5 billion in the third quarter, resulting in a total of $22.1 billion worth of multifamily properties in outstanding distress.

Sellers put another $5.1 billion worth of apartments on the sales block during the quarter. Yet while the level of offerings is still higher than closings, the gap between the two isn’t as wide as it was a year ago.

Year-to-date through September, sales on 580 apartment properties worth nearly $8.8 billion were completed, another 1,153 properties worth more than $19.3 billion were offered on the market and 1,127 multifamily assets accounting for some $15 billion entered the category of “newly distressed.”

Cap rates also seem to be shifting, albeit slightly. Of the transactions that closed on garden apartment properties, the average cap rate rose by 10 basis points during the third quarter. Caps on mid- and high-rise properties rose by even more.

RCA notes that for roughly one in five multifamily properties that changed hands between July and September, the cap rate landed between 7% and 7.5%. On more than 25% of closed deals, cap rates topped 8%, whereas less than 10% of properties traded at that level during the peak of 2007. And whereas 45% of all deals sold at a sub-6% cap rate during the 2007 peak, only 15% of properties did so in the third quarter, and most of those assets, according to the firm, involved 50 units or less.