[caption id="attachment_70241" align="alignleft" width="200"] Katherine Higgins[/caption]
Marin County apartment sales in 2012 turned from a buyer’s market at the beginning of the year to a strong seller’s market as inventory dropped and prices shot up.
For two- to four-unit sales, as the year began the majority still involved "distressed" properties, and prices for duplexes were as low as $475,000 in San Rafael. By mid-year, San Rafael had its highest per-unit sale price for a smaller complex. A triplex at 1712 Fifth Ave. sold for $1,050,000, or $350,000 per unit.
In southern Marin, there were virtually no distressed sales in this category. A fourplex sale in Tiburon at 26 Circle Dr. sold in two weeks of listing at $418,000 per unit, or $1,674,000.
Buyers came off the sidelines as loan interest rates dropped to around 4 percent for investors. The runup of rents continued as housing inventory dropped, preventing many first-time buyers from entering the market. Monthly rents in southern Marin are now nearly $2,000 for a one-bedroom unit with views and up to $2,800 for two bedrooms.
In the five-plus-unit category, only seven properties in Marin sold in 2012. Most were six- to eight-unit properties from Mill Valley to San Rafael. They didn’t stay on the market for more than two weeks and sold with multiple offers near the asking price. Southern Marin sale prices were 15 times gross income (gross rent multiplier,) and the multiplier in San Rafael was 12 to 13.
Other sales in 2012 were for more than 20 units in central Marin. Those complexes also sold almost immediately after coming on the market.
Interest rates at 3.75 percent and rising rents are attracting all-cash buyers looking for better returns on their money. Because of the lower rates, lenders now allow an investor to put down 25 percent to acquire a property. Past requirements of 30 percent to 35 percent turned off investors and slowed down the market.
The only element keeping the Marin apartment market from becoming “hot” is the lack of inventory. When owners realize how many serious buyers want to invest, they will put their properties on the market at higher prices that they will surely realize.
Look for this year to be a turning point in Marin apartment property pricing after years of flat values and distressed sales.