Market Market Update &
Rental Survey

SPRING 2026

MARIN MARKET UPDATE AND RENTAL SURVEY

Celebrating 50 Years in Marin’s Apartment Market
For five decades, Michael Burke has specialized in selling residential income properties in Marin County—one of the few agents to focus exclusively on this unique market. In 2021, he was officially joined by his wife, Pamela Burke, a long-time behind-the-scenes collaborator and now a licensed agent. Together, they lead the field in representing duplexes, fourplexes, and apartment complexes across Marin.

Selling income property isn’t the same as selling a single-family home. It demands expertise in tax-deferred strategies, income analysis, lease review, tenant relations, and tactful showings. Whether it’s a two-unit duplex or a 30-unit apartment building, you need a specialist with decades of proven results.

Rental Market Overview
According to the Q4 2025 CoStar Survey, Marin County’s average apartment rent stands at $2,855 per month, reflecting a 2.1% year-over-year increase and a 2.8% increase over the past two years. After largely plateauing in 2024, rents increased modestly in 2025, generally in line with inflation. Vacancy trends indicate the potential for continued, though measured, rent growth.

A balanced rental market typically reflects a 5.0% vacancy rate. Marin’s vacancy rate has declined to 4.1%, down from 5.0% in mid-2023. This tightening of available units places upward pressure on rents. CoStar projects average rents will reach $3,173 by 2030, representing an 11% increase, or approximately 2.2% annually.

Interest Rates and Property Values
Interest rates have experienced significant cycles over the past two decades. After peaking near 8% in 2007 and contributing to the 2008 recession, the Prime Rate declined sharply to 3.25% in 2009. It remained near that level through 2016, briefly rose, and then returned to 3.25% by 2021. Beginning in late 2022, rates increased rapidly, reaching a high of 8.50% in 2023. The current Prime Rate is 6.75%.

Apartment valuations are closely tied to interest rates. When rates are low, returns on alternative investments such as Treasury Bills are also lower, which reduces required returns on real estate. This results in lower capitalization (CAP) rates and higher property values. Conversely, higher interest rates lead investors to seek higher returns, increasing CAP rates and lowering valuations.

For example, a building generating $100,000 in net operating income would be valued at $2,500,000 with a 4% CAP rate, but only $2,000,000 at a 5% CAP rate.

Prior to 2007, the market operated in a higher interest rate environment with correspondingly higher CAP rates and lower gross rent multipliers. As rates declined over the following years, valuations rose and peaked around 2021. Today’s market more closely resembles the pre-2007 environment. While valuations have declined, rising rents have helped offset some of that impact through increased net operating income. At the same time, operating expenses—particularly insurance—have increased.

Owners who purchased properties between 2020 and 2022 may find that their buildings have not appreciated and, in some cases, may have declined in value.
As these market conditions have become better understood, sales activity has increased, though at prices below prior peaks. We are seeing renewed momentum as buyers and sellers adjust expectations. Please feel free to call for a complimentary evaluation of your building in today’s market.

Market Activity and Valuations
In 2025, there were 36 sales of apartment buildings with four or more units, consistent with historical averages and similar to last year’s activity. This represents a significant increase from 2023. Sales of two- and three-unit properties were also strong, ahead of last year’s levels and well ahead of 2023.

Market activity slowed somewhat heading into the fall, largely due to a single seller bringing 15 apartment buildings to market simultaneously. These properties were offered individually or as a portfolio, were well priced, and captured much of the market’s attention. Late in the fall, the entire portfolio went under contract and is scheduled to close in early 2026. With these properties off the market, inventory levels should normalize, returning to the typically limited supply.

Valuation changes have not occurred abruptly but have evolved over several years. Declining interest rates and rapidly rising rents drove values upward, peaking around 2021. Today, with higher interest rates and more moderate rent growth, valuations have returned to pre-COVID levels, representing a more balanced and sustainable market. Prices remain higher than earlier periods due to overall rent growth, but valuation metrics such as CAP rates and Gross Rent Multipliers (GRMs) have normalized.

Many properties currently sitting unsold are priced based on outdated 2021 expectations rather than today’s market realities.

Seller Motivations
There are generally two types of sellers in today’s market. The first includes owners who want or need to sell and are willing to transact at market-supported pricing. The second includes owners who will sell only if they achieve a specific price point. Properties in the latter category often remain unsold if pricing is not aligned with current conditions.

Notable Sales
Two sales in the past year stand out due to significant price adjustments. The first involved a 14-unit building in San Rafael, purchased in 2019 for $5,610,000. After substantial upgrades, it was listed in 2025 for just over $6,000,000, later reduced to $5,600,000, and ultimately sold for $4,700,000.

The second sale was a six-unit property in San Anselmo, purchased in 2018 for $2,585,000. It was quietly marketed at $2,450,000 and sold at the end of 2025 for $1,425,000.

There were also several strong benchmark sales that provide valuable comparables. An eight-unit building in Greenbrae sold near its asking price for $3,600,000, equating to 12.4 times gross income. A well-located fourplex near downtown Tiburon, consisting of all two-bedroom townhouse units, sold in December for $2,710,000, down from an initial asking price of $3,200,000. Additionally, we have a firm, non-contingent pending sale of a six-unit property in Mill Valley at $2,600,000. These transactions offer excellent guidance for valuing properties in southern Marin.

CAP Rates and Valuation Metrics
We are currently operating in a 5% CAP rate environment, compared to the approximately 4% environment leading into 2021. Smaller properties and those in premium locations may trade at lower CAP rates, while larger buildings typically command higher rates.

CAP rates are calculated by determining net income after deducting expenses a new buyer would incur, including updated taxes, insurance, repair allowances, a vacancy factor of 3–5%, and a management allowance of approximately 5%. Dividing this net income by the purchase price yields the CAP rate. Alternatively, dividing net income by 0.05 provides an estimate of value at a 5% CAP rate.

A simpler valuation method is the Gross Rent Multiplier (GRM), where a GRM of approximately 12.5 generally corresponds to a 5% CAP rate.

Preparing Your Building for Sale
In most cases, we do not recommend extensive repairs or renovations prior to selling, as many improvements are better left to the new owner. Basic landscaping and minor enhancements that improve curb appeal are worthwhile exceptions.

In today’s market, however, two items should be addressed before listing. First is the required deck inspection (SB-721), which was due by January 1, 2026. Lenders are now requesting inspection reports and clearance documentation. Second, electrical panels located inside apartments should be reviewed. Panels manufactured by Zinsco, Sylvania, Challenger, or Federal Pacific may be uninsurable, which can delay or prevent a sale. Replacing these panels prior to marketing is strongly advised, with typical costs ranging from $1,500 to $2,500 per panel.

Visit Us Online: MarinApartments.com
Our website includes:

Current listings & recent sales
Historical rent and market data
Landlord resources (local & statewide)
Weekly email updates (new, pending & sold listings)
Free property evaluations—just email us at mburke@MarinApartments.com

Final Thought
Marin’s income property market continues to show strength and resilience—even amid rising regulations and elevated interest rates. Whether you’re evaluating, selling, or just staying informed, we’re here to help.

Michael & Pamela Burke
Top Producing Agents – Marin Apartment Market

mburke@MarinApartments.com | MarinApartments.com