Overpriced Multifamily Listings in San Diego
In competitive listing situations, it is not uncommon for property owners to receive very different valuation opinions from different brokerages. But when pricing moves too far beyond where buyers can reasonably underwrite a deal, listings tend to sit on the market while investors shift their focus to other opportunities. When performing a property valuation, “buying the listing” with an inflated valuation may secure the assignment, but it rarely positions the property to trade and if the market adjusts, the property may miss its window to sell, often leading to significant price reductions or even a complete relaunch.
Current data in San Diego suggests this may already be happening.
Of the 170 multifamily listings currently on the market, over 35% have already exceeded the 154 day historical average time on market, and that number continues to grow each day. Over the past 12 months, 5+ investment properties in San Diego have taken roughly 150 days to sell on average, closing at approximately 6.5% below their original list price, and that figure does not include price reductions during the marketing period.
When pricing aligns with what investors can realistically finance and underwrite, properties continue to trade. When it doesn’t, listings often trend toward extended marketing timelines and future price adjustments.
The Hidden Cost of Overpricing a Property
Many sellers assume there is little downside to testing a higher price. Unfortunately, the consequences often compound quickly.
Tenant Turnover Becomes Harder to Fill
When a property is listed for sale and a unit becomes vacant, leasing the unit becomes more difficult. Prospective tenants are often hesitant to move into a building that is actively being marketed for sale. They worry about:
New ownership raising rents
Possible renovations or repositioning
Future relocation
As a result, vacancies can sit longer, which reduces income and weakens the property’s financial performance while it’s on the market.
Institutional Buyers Stop Taking the Listing Seriously
Multifamily investors, especially institutional buyers, underwrite every property carefully. Underwriting is both a science and an art. Experienced buyers analyze rents, expenses, financing assumptions, and comparable sales to determine a realistic purchase price.
When a listing price is significantly above where underwriting lands, two things happen:
Buyers assume the seller is not serious about selling.
Buyers assume the agent is not credible.
Once that perception forms, buyers typically move on to other opportunities. Even if the property eventually undergoes price reductions, those buyers rarely return.
In many cases, the listing has already lost its momentum.
Financing Reality Eventually Sets the Price
For 5+ unit apartment properties, financing plays a major role in determining value.
Lenders evaluate:
Net operating income
Market rents
Debt coverage ratios
Comparable sales
Cap rate expectations
If the numbers do not align with financing standards, the deal simply doesn’t work. Even in prime locations, buyers are not going to stretch far beyond market norms for downpayment because lenders won’t support it. At some point, the math breaks down.
One advantage ACI Apartments has developed after 40+ years in the business is close relationships with multifamily lenders. This allows our team to understand financing trends in real time and align pricing with what buyers can actually fund.
Accurate valuations start with understanding how a property will be financed.
Many Brokerages Aren’t Actually Investing in the Listing
Another issue with inflated pricing is how the listing is marketed. When a brokerage wins a listing simply by quoting the highest number, they often have little incentive to invest heavily in marketing.
The process usually looks like this:
Create an Offering Memorandum
Post the listing on LoopNet
Send a few email blasts
Use the listing as leverage to call other owners
In other words, the listing becomes a lead-generation tool, not a serious sales effort. Brokerages that value properties correctly and commit to selling them often invest thousands of dollars into marketing. An inflated price would discourage meaningful marketing investment if the brokerage planned to commit its own resources to properly promote the property.
At ACI Apartments, our property marketing strategy includes:
Google Ads campaigns
SEO-driven property landing pages
Multiple targeted mail campaigns
Skip-traced ownership call lists
Institutional-quality Offering Memorandums
Paid promotion on Instagram, Facebook, and LinkedIn
This level of exposure requires real financial commitment. If a brokerage quotes a high price but has no skin in the game, their goal may be securing the listing, not selling the property.
What the Data Shows
Let’s look at the numbers.
ACI Apartments Performance (5–50 Units)
9 current listings
6 currently pending
Average days on market: 89
Days pending are included in that number
All of our 2026 listings transactions went under contract in under 55 days.
Industry Averages
Across the broader San Diego market:
Current Average days on market for active listing: 154 days
Percent of properties already over the average days on market: 36%
12 Month average days on market: 150 days
Average difference between list price and sale price: 6.7% (this does not take into account original list price so is most likely a bigger delta).
Looking specifically at the four largest brokerages by listing volume:
60 active listings
9 currently pending
Average days on market: 118 days and counting
San Diego’s Real Problem Isn’t Buyers or Sellers
There is a common narrative that the market is slow because buyers have disappeared. That’s not the case. San Diego also doesn’t have a shortage of buyers, in any economic cycle. What the market actually has right now is a valuation problem.
Properties that are priced correctly are still trading.
Properties that are overpriced are sitting.
Accurate pricing that is grounded in financing realities, market data, and investor expectations is what ultimately determines whether a building sells.
Thinking About Selling Your Investment Property?
Understanding the real value of your property in today’s market is the first step toward a successful sale. If you’re considering selling and want a valuation grounded in current lending conditions, investor demand, and real transaction data, it may be worth speaking with a brokerage that has been navigating San Diego’s multifamily market for decades.
ACI Apartments has specialized in San Diego apartment sales since 1982.
If you’d like to discuss the realistic value of your property or explore current market conditions, our team is always happy to provide insight. You can give us a call or fill out our confidential valuation form. Check out Christina Labowicz resume at Homes.com