With fewer than 50 apartment properties trading hands each month, it's little surprise that apartment sales fell dramatically in the first quarter of 2009. Yet the scope of the fall is still staggering.

In the first quarter of '09, only $1.8 billion in apartment assets (totaling 152 properties) changed hands, according to Real Capital Analytics, a New York-based research firm that tracks commercial real estate. That’s a drop of 86 percent from a year ago. Volume fell 61 percent from the fourth quarter of 2008 and offerings outpaced closings by five to one.

“We’re basically at zero,” says Dan Fasulo, managing director at Real Capital Analytics.

Even in seemingly strong markets, such as the Washington D.C. metro area, things ground to a halt. The region saw its first large sale of the year last week—GlobeSt.com reported that Cambridge Court, a 544-unit garden and mid-rise apartment complex in White Marsh, Md., was sold for $65 million.

“It really has been quiet since the fourth quarter,” says Grant Montgomery, a vice president at Delta Associates, an Alexandria, Va.-based firm that tracks real estate in the Washington D.C. and Baltimore areas. “There were things on the market, and there were rumors, but nothing happened.”

Only Los Angeles (with more than $200 million in sales), Manhattan, Northern New Jersey, and Indianapolis (because of a large transaction by Denver-based REIT AIMCO) had more than $100 million in sales. Real Capital Analytics said most properties that did sell in the first quarter were between $5 million and $10 million. The firm attributes that to the continued presence of Fannie Mae and Freddie Mac in the sales of smaller assets. Cap rates for properties with a price tag of more than $30 million have risen 120 basis points, while they haven’t moved much for properties below that threshold. Only 8 percent of first quarter sales were for more than $50 million. Garden apartments pulled the market down, dropping 68 percent to only $1.3 million in volume from the fourth quarter of 2008.

“We’re seeing a crisis of confidence,” Fasulo says. “Investor confidence drives transactions. It’s not uncommon for there to be no investor confidence at the bottom.”

If Real Capital Analytics’ Troubled Assets Radar is any indication, we may soon hit that bottom. A whopping 420 properties (totaling $4.9 billion) pushed the total value of assets on the radar up by 50 percent. Real Capital Analytics says there were $11 billion worth of multifamily assets in default, foreclosure, or bankruptcy at the end of March.

Other research firms say the same thing. Reis said that CMBS delinquencies rose from 1.14 percent to 1.76 percent, or $10.7 billion, in the first quarter. It notes that a third of these loans were in multifamily. And once those distressed assets hit the market, experts say the numerous multifamily vulture funds waiting to finally jump into the market will do so And ultimately, that's what will finally push up transaction figures.