Blake Blackburn, Multifamily Advisor with Visintainer Group, shares insights into cap rates, rent growth, and tenant competition in the Central Valley multifamily market for Q2 2025.
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Hey everyone. This is Blake Blackburn, multifamily advisor with Visintainer Group, giving you a quick update on the Central Valley multifamily market. In quarter two, we saw an average cap rate of 6.48% the highest we have seen since 2019, that is being driven by higher interest rates requiring buyers to demand stronger returns and sellers having to adjust their pricing in order to get deals done. But the bid-to-ask gap still persists. Buyers are underwriting more conservatively, and owners, after years of strong income growth, are reluctant to meet the market.
On top of that, rent growth has been minimal over the past year, with many landlords opting not to increase rent in order to avoid turnover. With over 11,000 new units delivered in the Central Valley over the past five years, competition for tenants has only grown. All of this means is that deals are happening, but only when pricing and expectations align.
I’ll keep sharing updates like this to help you track where the multifamily market is headed.