Late to the discussion here - but this is my biggest concern with a apartment purchase in this environment.
This eases my mind, at least a little bit: http://www.freddiemac.com/multifamily/pdf/mf_property_valuations.pdf
Conclusion
It is an unusual time for multifamily fundamentals and capital markets. With interest rates low and the stability of cash flows from rental properties attractive, the asset class is getting more attention than usual. On the surface, it is easy to raise red flags when looking narrowly at some factors, such as cap rate, impacting the market. Yet, with a more broad view, it becomes evident that current valuations in the multifamily market are not at the edge of a cliff. Interest rates will almost certainly rise in the medium and long term, which will have a downward affect on asset valuation. However, there are offsetting factors (e.g., rent growth and new multifamily supply)that will push values up. With the understanding that today’s valuations are justified and forecasts of fundamentals are strong, market participants can be confident that the positive attention that the multifamily sector has drawn in recent years is not doomed to a rapid shift downward and that multifamily markets remain healthy.
