For years real estate agents have recommended pricing homes using a technique called ?just under? or ?9-ending? pricing. Thus, up until recently, almost all homes were priced ?just under? what the seller was really thinking the home was worth (e.g., a million dollar home was priced at $999,999). It was a ubiquitous tactic even though most agents, when asked, weren?t really sure why they did it?after all, you see that kind of pricing everywhere from supermarkets to car dealerships. Surely, those folks know something profound about pricing strategies and buyer tendencies. But, over the past couple of years, lots of agents have begun recommending that sellers price their homes ?on the number? (e.g., price it at $1,000,000, not $999,999).
There are a couple of good reasons to do this. One, ?9-ending? pricing feels a bit underhanded and does not necessarily seem like it would work. Buyers are rational actors that objectively compare price and other factors when making a home buying decision. Two, internet search tools permit consumers to search the MLS at will. But, the search parameters are often limited in $50,000 or $100,000 increments. Thus, if a seller priced her home at $999,999, someone searching for homes from $1 million and up would not see her home.
As a result, many agents (me included) began recommending to sellers that they price their home ?on the number? especially if that number was divisible by $50,000. Simple enough. A recent study has shown, however, that the decision to price ?on the number? is not so simple after all. Indeed, there is something to the ?just under? pricing strategy. The study found that sales were significantly higher when the strategy was used and that buyers were not as rational as we would think. The study pointed to a couple of psychological cues and phenomenon. But, boiled down, it seems people get a little emotional kick by ?just under? pricing. Indeed, each home’s sales price must be specifically designed to draw the most attention to that home. No universal rule can be applied and all the variables must be assessed in the light of good judgment.
A recent story in the Marin Independent Journal about the City of Novato?s efforts to normalize and accelerate home re-sale inspection processes was well received by many of my clients. As you probably know, all homes sold in Novato must be inspected prior to being sold. While many people think that the home re-sale inspection is nothing more than a chance for the City to generate additional revenue, it is much more than that.
Truth is, most cities and towns in Marin require re-sale inspections. And city inspectors help ensure that when we buy homes in Novato, those homes are up to minimum standards of health and safety?a valuable service in my book! They also ensure that when we buy a home in Novato, we receive a copy of the inspection report (which must be given to the buyer, who must then send in confirmation of receipt of the report). Thus, full disclosure of most permit issues are on the table.
But over the past few years the inspection process was chastised for being too slow and too inconsistent. Inspections could take weeks to be scheduled and once the done, it could take another 10 business days to obtain the report (so you could be looking at a good 45 days between signing up for an inspection and receiving the report). This ruffled the feathers of buyers and sellers alike who had agreed to close in escrow sooner (truth is, sellers should have the inspections done ahead of time anyway, but that is another issue entirely).
In addition, many agents noted that some inspection reports identified issues that other reports ignored. They complained that the inconsistencies in the reports resulted in an inability to give concrete advise to their clients. In addition, if the report said something needed a permit or needed to be fixed, there was no meaningful protocol to appeal that finding. All of this is currently being addressed by the City, which should be applauded for acknowledging the issue and taking meaningful steps to address it.
The Marin condo market has been the hardest hit segment of the Marin market over the past two years. Inventories have swollen and prices fallen, in some places, by as much as 20%. Yet, depending on the complex, some condos continue to sell very well at appreciating amounts. Overall, there are currently 254 units on the market in Marin, with about 58 of those under contract (about half of which are “Pending”—meaning that the buyer has removed all contingencies (this status denotes a high likelihood that the escrow will close successfully). Over the past month, about 43 condos sold. This puts the absorption rate at about 3 months, which is quite low in light of recent history.
For more information on Marin condos, go to: AllMarinCondos.com.
San Anselmo (like many parts of Marin County) is HOT! Homes priced under $800K are selling extremely well right now (six sold in the past 30 days, with several new listings just hitting the market). Homes in San Anselmo priced between $800K and $1 million are in short supply (only 3 active listings on the market) and sell fast so long as they are nicely maintained, updated, and/or located in desirable neighborhoods. In fact, the current absorption rate for homes under $1 million in San Anselmo is under one month?underscoring the extremely low inventory (if you are thinking of selling and your home is in this price range, you are in the driver?s seat). That is the definition of HOT!
The low inventory phenomenon extends into the higher price points as well?incredibly, homes priced between $1 million and $2 million in San Anselmo are selling so rapidly that the current inventory will last less than 2 months. As with the rest of Marin, homes priced correctly may or may not get multiple offers?note: the winning bid (which is not always the highest bid) is likely to be at asking price or just above (unlike the frenzied market of several years ago when overbids were in the stratosphere). And if you price your home too high, buyers will let you know by not writing offers.
Homes in San Anselmo (including homes that are active and pending) have been on the market for an average of 62 days and homes that sold in the past month were on the market an average of 63 days.
|
Price Range
|
Units Total
|
Active Listings
|
Pending Listings
|
|
Up to $799K
|
8
|
75%
|
25%
|
|
$800K – $899K
|
4
|
38%
|
62%
|
|
$900K – $1 mil.
|
2
|
50%
|
50%
|
|
$1 mil. – $1.25 mil.
|
10
|
70%
|
30%
|
|
$1.25 – $2 mil.
|
13
|
82%
|
18%
|
|
$2 mil. & up
|
6
|
84%
|
16%
|
If you would like me to run the exact numbers on your neighborhood, just give me a call at (415) 897-4075. It is my pleasure to be of service.
Homes for sale in Tiburon and Belvedere, which boast some of Marin County?s most exclusive and luxurious estates and homes, continue to receive a lot of attention. Anything under $2 million in either Tiburon or Belvedere is likely to attract lots of attention. Yet, in Tiburon there are currently three homes for sale in the million dollar range?while many of these homes tend to be smaller and/or in poor condition, in less desirable neighborhoods, and/or located on a steep hill, etc., they provide a great opportunity for entry level Tiburon/Belvedere buyers.
The bread and butter homes of Tiburon are priced between $1.5 million and $2 million and sell reasonably quickly so long as they are nicely maintained, updated, and/or located in desirable neighborhoods. Indeed, the absorption rate for these homes is about 2 months, which is very good. As with the rest of Marin, homes priced correctly may or may not get multiple offers?note: the winning bid (which is not always the highest bid) is likely to be at asking price or just above (unlike the frenzied market of several years ago when overbids were in the stratosphere).
Meanwhile, in Belvedere, anything under $2 million (there are very few these days) tends to move rapidly. But, the remainder of the Belvedere market is currently flat as few properties are currently in escrow. There are a number of super luxury homes (those priced above $4 million) currently on the market. Generally speaking, buyers are still in the driver?s seat for most properties. We can anticipate that more homes will soon come on the market as Spring settles into the land and the flowers begin to bloom in earnest.
Tiburon Home Sales Statistics
|
Price Range
|
Units Total
|
Active Listings
|
Pending Listings
|
|
Up to $1 million
|
3
|
66%
|
33%
|
|
$1 mil. – $1.5 mil.
|
7
|
43%
|
57%
|
|
$1.5 mil. – $2 mil.
|
14
|
50%
|
50%
|
|
$2 mil. – $4 mil.
|
19
|
69%
|
31%
|
|
$4 mil. & up
|
13
|
100%
|
0%
|
Belvedere Home Sales Statistics
|
Price Range
|
Units Total
|
Active Listings
|
Pending Listings
|
|
Up to $2 million
|
2
|
50%
|
50%
|
|
$2 mil. – $3 mil.
|
7
|
100%
|
0%
|
|
$3 mil. – $4 mil.
|
3
|
67%
|
33%
|
|
$4 mil. & up
|
8
|
100%
|
0%
|
Homes in Tiburon (including homes that are active and pending) have been on the market for an average of 103 days and homes that sold in the past month were on the market an average of 156 days. Homes in Belvedere (including homes that are active and pending) have been on the market for an average of 135 days and homes that sold in the past month were on the market an average of 71 days.
If you would like me to run the exact numbers on your neighborhood, just give me a call at (415) 350-9440. It is my pleasure to be of service.
Prices for high-end luxury homes continue to rise. As reported in San Francisco Chronicle, a recent survey by First Republic Bank shows that prices in the Bay Area edged up by 1.5% in the last 3 quarters of 2006, as compared with the same period in 2005. The average price of homes in First Republic?s survey was $2.92 million. The upward movement of price in that market segment can be attributed to low inventory in the $2 million to $4 million dollar market. The survey also noted, however, that prices slipped by 1.5% from the third quarter of 2006.
In Marin, 28 homes have sold this year in the $2 million-$4 million range with an average sales price of $2.56 million and an average listing period of 98 days. There are 96 luxury homes currently on the market in this price range, 24 of which are in escrow. Finally, 3 homes in Marin have sold so far this year in the over $4 million price range and another 36 remain on the market (including 2 that are currently in escrow).
|
Marin Cities & Towns
|
$2 Million — $4 Million
|
$4 Million & Up
|
|
Active
|
Pending
|
Active
|
Pending
|
|
Sausalito
|
8
|
2
|
2
|
0
|
|
Belvedere
|
7
|
2
|
6
|
0
|
|
Tiburon
|
14
|
6
|
11
|
0
|
|
Mill Valley
|
15
|
4
|
1
|
0
|
|
Corte Madera
|
1
|
0
|
1
|
0
|
|
Larkspur
|
0
|
0
|
0
|
0
|
|
Greenbrae
|
0
|
2
|
0
|
0
|
|
Kentfield
|
6
|
2
|
3
|
3
|
|
Ross
|
3
|
1
|
6
|
0
|
|
San Anselmo
|
2
|
0
|
0
|
0
|
|
San Rafael
|
8
|
2
|
2
|
0
|
|
Novato
|
4
|
1
|
1
|
0
|
As the above graph demonstrates, most of the luxury homes in Marin County are located in Southern Marin (e.g., Sausalito, Belvedere, Tiburon, and Mill Valley). Some interesting points worth noting: all of Kentfield?s $4 million & up homes are in escrow; all of Greenbrae?s $2 million to $4 million homes are in escrow; Marin?s highest priced property currently on the market is in Corte Madera (Bill Graham?s estate); and Tiburon takes the lead with the most homes in Marin?s luxury price segment with 31 total homes on the market or pending.
San Rafael homes continue to sell at a good pace across the board, particularly in the under $700K range. While many of these homes tend to be smaller and/or in poor condition, in less desirable neighborhoods, and/or located on a steep hill, etc., they provide the least expensive housing (especially for entry level Marin buyers) in Central and Southern Marin.
The bread and butter homes of San Rafael are priced between $700K and $900K and sell fast so long as they are nicely maintained, updated, and/or located in desirable neighborhoods. Indeed, the percentage of those in escrow shot up during the past month?50% of these homes are in escrow indicating a seller?s market.
As with the rest of Marin, homes priced correctly may or may not get multiple offers?note: the winning bid (which is not always the highest bid) is likely to be at asking price or just above (unlike the frenzied market of several years ago when overbids were in the stratosphere). Generally speaking, buyers are still in the driver?s seat for most properties. As noted in last month?s report, Terra Linda and Marinwood offer some relatively good values for buyers (especially those willing to take on homes that need some work).
Homes priced above $1.25 million in San Rafael have begun selling in earnest as evidenced by the rise in percentage of homes in escrow. Homes in San Rafael (including homes that are active and pending) have been on the market for an average of 74 days and homes that sold in the past month were on the market an average of 75 days.
|
Price Range
|
Units Total
|
Active Listings
|
Pending Listings
|
|
Up to $700K
|
15
|
47%
|
53% — No Change
|
|
$700K – $899K
|
39
|
62%
|
38% — 13
|
|
$900K – $1 mil.
|
16
|
50%
|
50% — 39
|
|
$1 mil. – $1.25 mil.
|
13
|
77%
|
23% — 12
|
|
$1.25 – $2 mil.
|
13
|
62%
|
38% — 22
|
|
$2 mil. & up
|
10
|
80%
|
20% — 12
|
If you would like me to run the exact numbers on your neighborhood, just give me a call at (415) 350-9440. It is my pleasure to be of service.
The Mill Valley market has really heated up over the past few weeks with the percentage of homes in escrow going up virtually across the board (homes in the $1.25 – $2 million range stayed the same). There are no homes in Mill Valley under $725K and that the homes under $900K tend to be smaller, in poorer condition, in less desirable neighborhoods, and/or located on a steep hill, etc.
As always, the bread and butter homes of Mill Valley (priced between $1 million and $1.25 million) sell quickly if they are nicely maintained, updated, and/or located in desirable neighborhoods. Those that are priced correctly are again seeing multiple offers. An astonishing 58% of these homes are pending (that is a sellers? market, folks).
Homes priced above $2 million in Mill Valley are not selling as briskly. In this price range buyers are being picky and the percentage of homes in escrow is very low. Meanwhile, the $1.25 million to $2 million range is looking pretty strong. Someday soon, these reports will refer to that price range as the ?bread & butter? homes of Mill Valley.
|
Price Range
|
Units Total
|
Active Listings
|
Pending Listings
|
|
$700K – $799K
|
9
|
44%
|
55% — 11%
|
|
$800K – $899K
|
9
|
66%
|
33% — 22%
|
|
$900K – $1 mil.
|
6
|
75%
|
25% — 25%
|
|
$1 mil. – $1.25 mil.
|
15
|
42%
|
58% — 8%
|
|
$1.25 – $2 mil.
|
21
|
81%
|
19% — No Change
|
|
$2 mil. & up
|
19
|
77%
|
23% — 13%
|
If you would like detailed data on any specific neighborhood, give me a call at (415) 350-9440. It is my pleasure to be of service.
Marin County, California, sits just north of San Francisco’s Golden Gate Bridge, straddling Highway 101, and boasts some of the most valuable real estate in the Bay Area. Homes in Marin (cities and towns include: Mill Valley, Sausalito, Tiburon, Belvedere, Corte Madera, Larkspur, Greenbrae, Kentfield, Ross, San Anselmo, San Rafael and Novato) have, by and large, maintained their value over the past 18 months. There are a number of neighborhoods that have continued to see prices appreciate (albeit, moderately) and other isolated neighborhoods where prices have dropped. Many condominiums, in particular, have experienced such declines in value—especially those located in Novato.
The following is a brief rundown of absorption rates and trends (based on last month’s numbers) in Marin County, as of March 1, 2007:
|
City/Town
|
Month’s Inventory
|
Up or Down?
|
|
Sausalito
|
5.6
|
.2
|
|
Mill Valley
|
3.4
|
1.1
|
|
Tiburon
|
3.6
|
.6
|
|
Belvedere
|
5.3
|
.9
|
|
Corte Madera
|
1
|
1
|
|
Larkspur
|
3
|
1.2
|
|
Greenbrae
|
1
|
1.6
|
|
Kentfield
|
4.2
|
.1
|
|
Ross
|
4.3
|
1.1
|
|
San Anselmo
|
2
|
1
|
|
San Rafael
|
2.2
|
1.3
|
|
Novato
|
3.5
|
1.9
|
When the absorption rate is under 3 months, we generally consider the market one that favors the sellers. When the absorption rate is between 3 to 6 months, you have a more balanced market. Once you get above 6 months, however, prices tend to make meaningful strides downward. In Marin County, while we have pockets of communities that have absorption rates higher than 6 months, we are seeing well-priced homes sell with multiple offers even in those communities.
*Note: If your town’s absorption rate is not sampled above, or if you would like information on condominiums, please call Kyle at (415) 350-9440 or go to NorthBayRE.com.
Overall, the market in Novato seems fairly typical. There are currently 126 active listings (single family homes) for sale (the most in Marin County). About 1/3 of those are priced under $750,000?making Novato a desirable option for buyers priced out of Central and Southern Marin (for example, Mill Valley, at the time of this writing, has just two listings under $750,000).
Nicely maintained and updated homes, located in nice neighborhoods with good schools (and, of course, priced well) are seeing multiple offers and selling quickly. Multiple offers today, however, does not translate into overbidding as it did a couple of years ago. Buyers are still in the driver?s seat for most properties in Novato. In fact, even in the $600,000 price range, there are homes lingering on the market.
Homes priced above $800,000 in Novato, are picking up steam. Yet, buyers in this price range, exhibit caution and discrimination?the percentage of homes in escrow is in line with expectations and just up from last month (about 3%-4%).
In counterpoint to last month, the $1 million to $1.25 million price range, which was looking very strong at that time, is now back to Earth. Meanwhile, the $1.25 million and up price range is looking very strong. Novato?s upper-end market is being propelled in large part by an influx of residents from Southern Marin. Newer homes and those with a country feel on large lots are gathering momentum as we head into the Spring.
|
Price Range
|
Units Total
|
Active Listings
|
Pending Listings
|
|
$500,000 – $599,999
|
13
|
64%
|
36% — 4%
|
|
$600,000 – $699,999
|
26
|
53%
|
47% — 6%
|
|
$700,000 – $799,999
|
29
|
62%
|
38% — 4%
|
|
$800,000 – $999,999
|
34
|
85%
|
18% — 3%
|
|
$1 mil. – $1.25 mil.
|
13
|
92%
|
8% — 19%
|
|
$1.25 mil. – $1.5 mil.
|
9
|
45%
|
55% — 42%
|
|
$1.5 mil. & up
|
26
|
81%
|
19% — 19%
|
If you would like detailed data on your neighborhood, give me a call at (415) 350-9440. It is my pleasure to be of service.
