The stock market has reached new all-time highs, and much of that momentum is being driven by expectations that the Federal Reserve will lower interest rates in the near future. As the market anticipates these changes, we’re already seeing positive effects across the Bay Area multifamily real estate market.
Lower interest rates will directly impact mortgage costs, making financing more affordable and increasing buyer confidence. This is welcome news for both sellers and buyers.
What Lower Rates Mean for Buyers and Sellers
For sellers, lower mortgage rates often translate into stronger offers. When monthly payments decrease, buyers are able—and more willing—to pay higher prices for well-performing properties.
For buyers who have been waiting on the sidelines, this shift is creating urgency. As borrowing costs decline, many are becoming more aggressive in their search for multi-unit properties.
Upcoming Listing Near Grand Avenue
A five-unit apartment building located just two blocks from Grand Avenue—within walking distance to shopping and restaurants—will be coming to market within the next 30 days.
The property is expected to be priced around a 5.7% cap rate. If you have any interest or would like more details ahead of the public listing, please feel free to reach out.
This will be my third listing since May, and the pattern has been consistent: when a property is priced correctly and located in a strong area, buyer interest follows quickly.
Buyer Demand Remains Strong
The buyer’s market for multi-unit buildings continues to show strength. I’ve met with many qualified buyers who are actively looking to acquire apartments, particularly those who are well-capitalized and planning for long-term holds.
If you’d like to review information on recent listings, sales, or past newsletters, you can find more details through East Bay Apartment Advisors.
Current Market Valuations
The Federal Reserve has recently indicated the possibility of another rate cut in the coming days or weeks. The stock market is reflecting this expectation, with the Dow Jones Industrial Average reaching record highs.
After a prolonged period of higher interest rates, buyers and sellers are now largely aligned on current valuations. Once the Fed announces the timing of rate reductions, we expect increased market activity. Historically, lower mortgage rates allow buyers to stretch slightly on pricing, supporting stronger sale values.
Sellers are still receiving solid offers for properties that are:
- In good locations
- Generating stable rental income
- Free of major deferred maintenance
Outlook for East Bay Rents
Rental demand is warming up across the East Bay. We recently filled two vacancies with modest rent increases and saw strong interest during the application process.
Property management companies are reporting similar trends. Many Bay Area employers continue to bring employees back to the office—often in hybrid formats—which supports local rental demand.
At the same time, new apartment construction has slowed significantly. This reduced supply should continue to drive strong interest for available units and help maintain low vacancy rates as we move into better weather.
If you’re struggling to fill a vacancy or have questions about rent strategy, feel free to reach out. In many cases, offering a temporary rent concession is more effective than permanently lowering rent—for both new and existing tenants.
Current Sales Market
If you’re considering selling in the next 6–12 months, now is an ideal time to start planning. The market remains strong, with buyers underwriting deals based on income levels similar to pre-COVID conditions.
One common concern sellers raise is how to defer capital gains taxes. Two commonly used strategies include:
- Delaware Statutory Trusts (DST)
- 1031 Tax-Deferred Exchanges
I’m happy to provide more information on either option.
Earlier this spring, a fourplex in Oakland went into contract at list price with a short closing and no issues—another example of how strong pricing and full marketing can lead to excellent results.
Guidance Matters in a Shifting Market
If you’re thinking about selling your apartment building, I can help with valuation, strategy, and guidance throughout the process.
I’m also in regular contact with top East Bay multi-unit lenders who are actively closing transactions and can provide financing options for qualified buyers.
In today’s market, experienced representation is critical. Proper exposure—through listing platforms, broker networks, and targeted email campaigns—can place your property in front of tens of thousands of qualified buyers.
Looking forward to a strong Fall 2025.
If you have questions, want an evaluation, or would like to discuss opportunities, feel free to reach out anytime.