In January, Real Capital Analytics, a research firm based in New York, reported abysmal apartment sales. February wasn't much better. Nationally, around $600 million in apartment assets changed hands. The firm's preliminary numbers say 44 assets sold in the month, down from the revised number of 47 in January.

"We're in a period of massive stagnation right now," says Dan Fasulo, managing director for Real Capital Analytics. "We probably haven't seen this since the early '90s. There's a lack of confidence to transact. If it's not the investor, it's the lender. If it's not the buyer, it's the seller. The appraisers are fearful that they're being too aggressive or conservative. No one knows where values are."

If it weren't for the REITs, those numbers would have been smaller. Chicago-based Equity Residential sold a four-property portfolio in Hartford, Conn., while Denver-based AIMCO sold portfolios in San Antonio and Indianapolis.

"On the public side, you see companies selling assets to pay down debt and raise capital in this complicated market," says Ric Campo, CEO of Camden Property Trust, a REIT based in Houston.

When deals do close, they aren't very big. The largest single asset sale in February was only priced at $40 million. Campo is not surprised by the figures, noting that today's most active buyers continue to be smaller, local operators. They can raise $4 million to $5 million from friends and relatives, leverage the rest through Freddie Mac or Fannie Mae, and close the deal.

"Anything over $30 million to $40 million dollars doesn't get done," Campo adds. "For a $100 million deal, you need to raise $20 million or $30 million. That's much more difficult deal to get today than a $20 million deal."

Campo stills sees a major gap between sellers' asking prices and buyers' offering prices, but Real Capital Analytics says that gulf may be closing. The firm says asking prices have increased 30 basis points already this year.

Real Capital Analytics also reports that the offerings and closings are greater for garden-style apartments than the traditionally prized mid- and high-rise properties. The offer-to-closing imbalance is widest in the West, with three offers for every closing. Overbuilt markets fared worse: Phoenix has had 42 offerings valued at $769 million since Oct. 1, but only five closings totaling $118 million.

Fasulo doesn't see these closings increasing until the capital markets return to normalcy and many of the distressed properties in struggling markets are sold to "healthy third parties."