Market Report - August 2010

After a difficult 2009, Marin real estate sales throughout the first half of 2010 have been showing increasing signs of strength. Here are seven key indicators that make us optimistic about the market:

1. Transactions are up dramatically, increasing 21% through mid-August vs. same period last year. There have been 1,445 sales so far this year, vs. 1,190 last year for the same period.

2. REO’s and short sales as a percentage of overall sales are declining. They represent 19% of all sales so far this year. Although this number is historically very high for Marin, it is down dramatically from last year, when 24% of all sales were distressed properties.

3. Average sale price has increased 11%, from $834,123 to $925,026. Average sale price is a good indicator of the general direction of the market, and reflects that higher priced properties are beginning to sell more now.

4. Multi unit properties are selling again, now to all cash buyers. There were seven multi unit closings in Marin in the last 45 days. Most of them - and all of the big ones - were to all cash buyers. One of them was our listing, 11 Hillside, and the Seller’s rationale was pretty simple: he felt it was time to move money out of the stock market and into real estate, as prices have come down and his returns would be higher.

5. Average days on market is heading down, from 98 days on market in 2009, to 91 for properties year to date.

6. Luxury properties, above $2 Million, are moving again. Unit volume almost doubled in this segment this year, as 113 properties have sold, the highest being $14,000,000.

7. Price per square foot is up slightly, from $458 per foot to $471.

Increases are being seen in almost all towns, although the increases skew to more affordable markets. Fairfax sales are almost double what they were last year, as is Greenbrae. Novato is way up, as is Mill Valley. The only town showing a decrease in sales is Ross, but the number of transactions per year there is so low - 12 so far this year - that it is really a statistical anomaly.

Inventory continues to build. There are now 1,622 homes on the market for sale, and 24% of them are in contract. Technically, that’s a Buyers Market, and that level has held steady for the last few weeks. August is typically a slow sales month, with volume traditionally picking up again in September. We’ll let you know if that pattern holds in the next few weeks.

Source: Bareis MLS 8/15/2010

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We’ve recently listed an amazing property in Tiburon. The house is right on the water, with portions of it actually built on piers over the water. It has it’s own private beach, great views, and amazing privacy. Check it out here:

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Looking for a great family house in Corte Madera? Look no further than 29 Key Largo Course. This house went into contract three days after it’s first open house and just fell out, so it is available again for buyers who want the following:

- Five bedrooms

- Over 2000 sq feet - 2.088 according to tax records!

- Giant backyard - the lot is just over 1/4 acre

- Access to the bay via San Clemente Creek, which borders the backyard

All this for $965,000!

The house has a terrific floor plan, with the center of the home a huge great room, leading directly to the backyard.

Cost per sq ft is $462, and the average sold price per sq ft in Corte Madera for three bedroom or more homes over  the last six months is $517.

If you have lots of kids, or always wanted to own the home that all the kids came over to play at, then call us at 415-925-3261 and we’ll get you in to see it now!

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Interest rates are historically low, especially given that we are coming out of a recession. That creates an historic buying opportunity, as we have low prices combined with cheap financing. The combination of the two is almost unheard of, because typically cheap money drives prices higher.

Here’s more evidence that this is a great time to buy because of this the phenomenon. The Housing Affordability Index, tracked by the National Association of Realtors, is at it’s highest level since it’s inception in 1989!

The index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median-priced, existing single family home. The typical family is defined as one earning the median family income as reported by the US Bureau of the Census. The prevailing mortgage rate is the effective rate on loans closed on existing homes form the Federal Housing Finance Board. All of these components are combined with underwriting standards to determine if the average family can qualify for a mortgage.

For the quarter just ended, the index is at 177. That means that a family earning the median income has 170% of the income necessary to qualify for a conventional loan covering 80% of the price of a median priced single family home!

In other words, relative to income, housing is the cheapest it has been in a very, very long time. Back in the crazed market of 2005, the index was barely above 100, so the average family could barely afford to buy a home.
Obviously, Marin is different, in that home prices and incomes here skew much higher than the national average. But if someone were to track and compute all of the data, it is likely that the same would be true for the Marin market as well. Average sale price has declined significantly, and while income has fallen as well, it hasn’t declined as rapidly. The Marin affordability index is probably at its highest rate in years as well!

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April Numbers: Transcations, Inventory, Average Sale Price UP!

April numbers are UP! The market is continuing the trend we’ve seen the last several months, with transactions and average sale price up, days on market down, and inventory building.

There were 204 closed sales in April, a very healthy 40% increase from last April. Average sale price increased significantly as well, to $1,000,682, 17% higher than last year. This is reflective of movement in the higher price categories, which drives the average higher, rather than an increase in pricing. We are, for the most part, seeing pricing hold very steady for the last few months.

In fact, on a per square foot basis, price per square foot this year to date is EXACTLY the same as it was in all of 2009: $445 a foot, for all of Marin County. So prices are not going up - inventory coming on is meeting buyer demand.

Today’s buyers are careful, analytical, and patient. They know the numbers when they walk in to a house. We are getting more questions about cost per square foot than we ever have before at open houses, as the wealth of information available on the internet becomes more widely used. They discuss lot size, comps, lots of data that before was not nearly as important.

They also aren’t afraid to wait, as there are plenty of choices out there. Inventory is pouring on to the market every day right now. Right now there are 1,615 homes for sale in Marin County, which is about as high as we have ever seen. We’ve been involved in several transactions where the ultimate buyer was one who had made an offer, did not come to terms, waited several weeks, and then came back to purchase, as either side changed their position.

The heart of the market is still great family homes in good school districts. Right now, we have 34% of homes in contract in Marin. The lower the price point the stronger the market. For homes under $750,000, 44% are in contract, very strong but down a little from last month. Move up homes, from $750,000-$2,000,000, are at 24% in contract, almost a balanced market. Luxury homes over $2,000,000 are holding steady at 16% in contract, which is better than that market has been in a long time.

Corte Madera and Larkspur continue to be very strong, with 32% and 30% of all homes in contract. Novato is on fire, with 45% in contract. Sausalito still lags the rest of the county with 16% in contract.

Pent up demand, on both the buy and sell side, is driving this market. People’s lives have been on hold while they were waiting for the market to shift, and now that they see signs of life, they are moving!

Source for all data: BAREIS MLS.

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