I did a cost analysis on this unit using some agressive assumptions about the quality of construction and condition. Going strictly by the numbers and when including the driveway, walks, landscaping, porch and some landscaping/fencing for a small yardlet to the rear, the cost new on this unit would be somewhere around $225k at the most, probably a bit less if I backed off on the quality.
However this unit is now 20 years old, so it isn’t new. Using a depreciation table and accounting for a reasonable remaining economic life of the structure it ends up coming down below $200k.
This doesn’t include the value of the site or the common elements in the project, which at the least apparently include a pool and most likely a small clubhouse or rec room. There are apparently 54 units in the project so the pro-rata cost of those improvements wouldn’t amount to more than about $5,000/unit, which would still put our costs for this unit at about $200k, not counting site value.
Raw land value could be in the $65k/unit range and having entitlements and approvals makes it worth quite a bit more, but some of those costs would go to the construction itself, so a $300k selling price could reflect the current value by cost based on current market conditions.
Of course, those costs would include a 20% developer incentive, which is surely higher than the market would bear right at the moment, and it also includes hard costs that are only now coming off peak pricing. By the time these developers, subcontractors and suppliers get a little hungry those costs could all come down by 15% and everyone would still be making a buck. The land value could easily come down by more than half in a depressed market.
I remember appraising existing 1980s apartment properties in the north county areas back in the mid-1990s at $40,000/unit inclusive of the land and improvements.
I think this unit could end up below $200k in an undervalued market, which would put it at a gross rent multiplier of ~140.00 if based on a market rent of $1400/month. Actually, at a $1400 monthly rent a $200k price would still be a little high. A 125 GRM would only result in a value indicator of $175,000. At $175k it would be just under 50% of the peak pricing for this puppy, which would put it back into line for the long term pricing trend.