Moving in to the second quarter of the year, we are seeing a tightening of inventory as sellers are holding properties off the market. This is due to positive performing apartment investments in an uncertain investment environment. The low inventory has resulted in a stabilization of prices, with most central Marin and Novato properties being offered in the 12.5-14.5 GRM range (depending on location, amenities and upgrades) and Southern Marin product offered up to 20 times rents for view properties in Sausalito.

Sales of smaller properties in the 2-4 unit range have slowed as buyers have pulled back from the aggressive pricing that does not make sense in a tough lending environment. Mortgage rates on 2-4 units are now higher than on 5 or more units. A typical loan for 2-4 units (non-owner occupant, investor buyer) can go as high as 7%. Rates for 5 or more units can be found at 6% interest only for a 3 year product to as high as 7% for a 10 year fixed interest only product. Check with local lenders for the most current rates.

More attractive financing for 5 or more units make these deals pencil even though the loan to value ratios can be as low as 60% for some Southern Marin offerings.