In the 2-4 unit category for the past six months, there were only 22 sales, with most at or just below asking price. But in about 30% of those deals, investors achieved price reductions from the asking price anywhere from 2-16% off the list price. The longer the property stayed on the market at what the investor perceived to be overpriced the lower the final sales price would be.
In the 5+ unit category there were only six sales, with a severe lack of inventory scaring off investors that were looking for better returns. Of the total sales more than 75% of the closed sales were below the asking price from 2-16%. The days on market range was 7- to a high of 228 days.
See the chart below.
Marin County Apartment Sales with Price Reductions 11/2017-5/2018
2-4 Units Total Sales: 22
| Address | Units | List Price | Sale Price | % Off Price | DOM |
|---|---|---|---|---|---|
| 558 Miller, Mill Valley | 3 | $1,249,000 | $1,075,000 | -14% | 156 |
| 830 5th, San Rafael | 3 | $1,175,000 | $1,130,000 | -4% | 111 |
| 2028 4th, San Rafael | 2 | $1,195,000 | $1,150,000 | -4% | 32 |
| 261 Woodward, Sausalito | 2 | $1,495,000 | $1,425,000 | -5% | 225 |
| 301 4th, Sausalito | 2 | $2,150,000 | $2,075,000 | -3% | 125 |
| 501 Bridgeway, Sausalito | 3 | $2,950,000 | $2,750,000 | -7% | 31 |
5+Units Total Sales: 6
| Address | Units | List Price | Sale Price | % Off Price | DOM |
|---|---|---|---|---|---|
| 55 Park Rd., Fairfax | 5 | $1,995,000 | $1,675,000 | -16% | 119 |
| 300 Poplar, Mill Valley | 10 | $2,995,000 | $2,800,000 | -7% | 7 |
| 45 Reed, Mill Valley | 10 | $4,575,000 | $4,275,000 | -7% | 228 |
| 22 Tamalpais, San Anselmo | 5 | $2,625,000 | $2,585,000 | -2% | 34 |
I expect prices to continue to soften as interest rates rise, rents remain flat and investors are looking for higher returns.
The increasing prices for apartment properties have hit their ceiling and are now headed back to a more realistic market that reflects the softening rental market conditions.