Marin County, California, Luxury Homes Report (August 2009–Sales and Inventory Analysis)

Marin County, CA’s luxury real estate market segment continues to take shape in the aftermath of the equities meltdown of Fall 2008. In our New Economy, buyers are placing emphasis on prestige locations, sweeping views, grand appointments, compelling “estate history,” and impressive scale. The luxury market in Marin remains weighted towards homes priced under $4 million, although we did have 3 sales of homes priced over $4 million in July 2009. The number of sales in July 2009 is off by 74% from July 2008. The news is not all negative, however, as we had several significant properties trade last month and another 30 luxury homes are currently in escrow. For a detailed snapshot of current national trends from the Institute for Luxury Home Marketing dated August 2, 2009, click here. Note, if you would like a local report relating to any town or zip code in Marin or San Francisco, call me at (415) 350-9440.

Buyers remain dubious of price stability (see chart below reflecting year over year median asking prices in Tiburon, Mill Valley, and Kentfield). But, increased conforming loan limits and a pronounced level of increased affordability across the board should help sales moving forward into the Fall as buyers with 25% down will obtain top-shelf financing for purchases of $1.6 million. While not necessarily “Luxury” territory here in Marin (although declining prices are putting some very nice homes into the sub-$2 million price bands), a sizable segment of buyers of luxury homes must sell their current homes first (80% of buyers are sellers). The chart below indicates that across the trend in Marin’s luxury segment is for lower prices — 10-25% lower than last year in Mill Valley, Belvedere, and Kentfield. 

The year over year inventory levels in Mill Valley have hovered at around 20% since May 2009 (much improved from a nearly 60% inventory increase in February 2009). Meanwhile, inventory in Kentfield has rocketed nearly 90% higher this year compared with last year. In combination, Tiburon and Belvedere inventory levels are about 70% higher than last year. Prediction: Kentfield and Tiburon / Belvedere prices will continue to recede through Q4 2009. Indeed, we can see that trend has set in dramatically in the above chart which tracks asking prices of homes currently for sale.  

Marin County, CA. Real Estate Update — August 2009 (Homes For Sale & Price Ranges)

Marin real estate has, it appears, survived the worst of the downturn. While prices are down across the board no matter how you slice it, the road to recovery is in view. Yet, virtually every call I get from potential buyers, at some point in the conversation, eventually turns to short sales and foreclosures — distressed sales remain featured on many buyers’ dance cards. In fact, distressed sales are very competitive and often receive multiple offers. In Northern Marin (a.k.a Novato), 82% of homes priced under $500,000 are in escrow (that’s 40 out of 49 homes!). In San Rafael, 84% of homes priced at or below $600,000 are in escrow (that’s 32 out of 38!). These sales are propelled by value, the $8,000 tax credit, and the increased FHA loan limits which went into effect in April 2009.

Early in the year, buyers were ALL talking about how they anticipated interest rates would go down to 3% (and some buyers were insisting that rates would go even lower). I would just nod my head and concede that was a possibility. After all, what do I know about the unknowable? But, I always pointed out that whatever rates fell to, you could never know the bottom until it was gone. And that rates would surely go back up again — I was not going out on a limb; every economist on Earth is saying the same thing (most believe this will occur by the end of Q1 2010). Sure enough, it seems buyers are picking up on this inevitability and they are out in droves. 

Inventory has dipped to 772 single family homes for sale (we had about 810 last month) in the Highway 101 corridor (this number excludes Western Marin inventory and condos). Open houses have been slower — as expected during Summer months. There is definitely a sense that with a little positive media and some further anecdotal evidence (and actual closings) that buyers are jumping because they believe the bottom is here or near, the market will surge with pent up demand. Certainly, well priced, updated homes in great locations are selling promptly. 

The following graph breaks down the current number of homes for sale and price ranges in Marin County’s HWY 101 corridor (e.g., Marin’s coastal communites are not included) in March 2009, along with the price ranges for each town and/or city.

On the buyer side we are noticing a shift in the selection and valuation of homes. From 1998 – 2008 buyers place a high “prestige” value on certain neighborhoods and were very focused on “I want to live in Sycamore Park”. Now we see buyers seeking “value”. They are comparing like priced listings in multiple Marin communities and seeing what value they can get for their dollar. Essentially, a buyer shift in focus from “prestige” to “value”. Sellers must be priced for perceived value.

Two other clear messages from buyers are: 1) A trend away from major remodels. This is likely a result of the changing credit markets and the loss of capital buyers experienced in the stock market meltdown. 2) A lack of willingness to write an offer on a property that is not priced in appropriate “strike zone”. Buyers seem to wait for appropriate pricing before coming forward with an offer vs. writing a low, more competitive offer. The rationale seems to be, “what if I write an offer and the seller accepts it? We will clearly have paid too much”. 3 – 5 counter offers are not unusual. These dynamics are not easy to anticipate much less manage. We manage these issues every day. 

If you are selling in Fall ’09, time on the market is not your friend. The “perfect home” for the “right price” should trade in its first 30-45 days. For a detailed executive summary providing statistics and trends relating to the Marin real estate market (or any specific zip code), please call me any time (I am Kyle Frazier, Marin Realtor & CRS, Morgan Lane Marin Real Estate) at (415) 350-9440 or e-mail me at [email protected] . It is always my pleasure to be of service.

Below is a sampling of recent media coverage relating to real estate. Note that most of these stories are positive. The theory of social proof suggests that a continued volley of positive news stories will likely influence other qualified buyers to buy. We will see.

More Americans Move to Improve
A growing number of Americans are changing residences in an effort to move into a bigger home or a better neighborhood, according to a recentstudy by Relocation.com. The most important reason people move is to live in a bigger or better home (26 percent), followed by living in a better neighborhood (24 percent); to be closer to family and friends (12 percent); to live in an area with a lower cost of living (9 percent); or because of a change in marital status (6 percent). A similar survey Relocation.com conducted in March found that people were more likely to move because of recession-related reasons. The shift in customer attitudes between the two surveys indicates that consumer confidence and optimism are improving, the company says.

Remodeling Activity on the Upswing
Residential remodeling activity rose during the second quarter of 2009, according to NAHB’s Remodeling Market Index, which measures remodeler perceptions of market demand for current and future residential remodeling projects. Indicators for future expectations and current market conditions rose nearly four points during the quarter. NAHB chief economist David Crowe says conditions have returned to near the levels of this time a year ago. “While remodelers remain cautious, they report business is looking a little better after several challenging quarters. The uptick in the expectations component suggests this trend will continue as the entire housing market begins its recovery,” Crowe says.

Pending Sales Rise for Fifth Straight Month
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6 percent over the previous month and is 6.7 percent above June 2008, NAR reported this morning. This is the fifth consecutive month that the pending sales index rose. 

In the Northeast, the index edged higher by 0.4 percent in June and is 5.8 percent above a year ago. In the Midwest, the index increased 0.8 percent for the month and is 11.6 percent above June 2008. The index in the South climbed 7.1 percent in June and is 8.9 percent higher than a year ago. In the West, it rose 2.9 percent but is 0.2 percent below June 2008. NAR chief economist Lawrence Yun attributes the rising index to a combination of market factors. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines." 

Tiburon & Belvedere CA Real Estate Market Report (August 2009 Home Sales Update)

The Tiburon and Belvedere real estate market is showing signs of gathered traction despite ongoing concerns on Wall Street regarding consumer confidence and spending. There are currently 102 active listings in the 94920 zip code, which covers Tiburon and Belvedere (down from 120 last month). Nineteen of these properties are priced over $5 million — however, three are currently in escrow and we did see a sale close for $7.5 million in July. This activity is up sharply from the flatline base experienced in the first half of 2009. Meanwhile, there is also fairly strong activity in the lowest price band (under $2 million), which accounted for 9 sales in July 2009. Overall, we saw 13 homes close escrow in July, as compared with 7 sales in April and May 2009, and 10 in June 2009. 

One interesting observation based on the below graph: not until March of this year did the median asking price for homes in Belvedere dip below that of 2008. Belvedere was the last Marin city to experience that shift (a full 6 months after Tiburon). Over the past several months however, that shift has become more exaggerated as prices begin reflecting market realities. Indeed, there are currently 2 homes for sale in Tiburon under $1 million and another home in Belvedere. Rarely do we see Belvedere homes hit the market under $1 million. 

 

 

There are currently 28 active properties listed for sale under $2 million in Tiburon and Belvedere — 10 additional homes are in escrow. For homes that sold in July 2009, the average price per square foot was $765 — although this number is skewed somewhat by the makeup of the sales last month, it is very low number that has caused sellers a high level of concern. Below is a chart with up to date figures relating to the number of homes on the market in Tiburon and Belvedere, along with the number of homes currently in escrow. Note in the chart below, beyond the entry level price band, activity was fairly slow this past month. Numerous additional ultra-luxury homes were removed from the market — typical for this time of year, but perhaps also influenced by the low price per square foot number noted above. 

 

Price Range	Total Active Properties	In Escrow
up to $2 million	28	26%
$2 million to $3 million	28	18%
$3 million to $5 million	28	10%
$5 million to $10 million	11	21%
$10 million and up	7	0%

 

Tiburon and Belvedere real estate that sold last month exhibited the following characteristics:

• Number of Sales: 13
• Average Days on Market: 136
• Price: $2.392 million
• Square Feet: 3,008 
  
• Price per Square Foot: $765

If you have any other questions or would like a custom market analysis of your home’s current likely sales price, please call me at (415) 350-9440. My name is Kyle Frazier and I am a Certified Residential Specialist (CRS) and Broker Associate with Marin Counties finest real estate firm Morgan Lane Marin Real Estate. It is always my pleasure to be of service. 

 

p.s. I know of several properties that are not being formally marketed on the MLS, so if you are looking to buy please call me to see if any of these may meet your needs. If you would like a copy of my Tiburon / Belvedere Hotlist, e-mail me at [email protected].

Mill Valley CA. Real Estate Market Report (August 2009 Home Sales Update)

The Mill Valley, CA. real estate market remains predictably unpredictable — after just 17 sales in May 2009, we had a robust 29 sales in June 2009, followed by 22 sales in July 2009. As I noted in last month’s report, the decline in sales numbers this month was expected as families focus more on vacations and outside activities. And September will bring even fewer home sales, along with a moderate rise in inventory and increased buyer activity.

Over the past quarter in much of Marin County, it has become apparent that asking prices have halted their downward spiral. As is evident in the graph below, which tracks the median price per square foot (down from $740 to $615), in Mid-June 2009 prices flattened out in Mill Valley. It will be interesting to see whether this flattening out carries over into the sales prices of homes trading this Fall and Winter.

San Rafael CA Real Estate Market Report (August 2009 Home Sales Update)

The big news in San Rafael real estate this past month revolved around the sale of Carlos Santana’s 1.7 acre, 7,000 square foot estate, which sold for $4.185 million after a short two weeks on the market. Congratulations Carlos! Meanwhile, San Rafael listing prices experienced a brief rise earlier this Summer, but have again begun a downward shift over the past few weeks. By comparison, asking prices in Novato have been rising for several months, leading many to beleive that the bottom has formed in Novato. It does not appear this phenomenon is being replicated in San Rafael.

[Click HERE for the rest of this article, courtesy of www.SanRafael101.com.]

Novato Real Estate Market Update (August 2009 Home Sales Report)

Last month, for the first time since I began writing Novato monthly updates back in 2006, I stated that it appears that the Novato, CA. market (for single family homes) seems to be improving in two meaningful ways. Certainly, sales have risen from last year and we have several months of increasing sales (as the inventory of short sales and foreclosures is quickly snapped up by motivated buyers).

But, perhaps even more importantly from the perspective of home owners, it also appears that prices at the entry level (e.g., properties priced below $500,000) have bottomed out. As evidenced by the chart below, the 90-day rolling average of Novato home prices has been rising since May 2009. Obviously, higher asking prices do not, ipso facto, result in higher sales prices (some local real estate companies train their agents to give sellers high estimated sales prices in an effort to get any all listings — a major breach of our ethical and fiduciary obligations, in my opinion). But, experts consider this development a leading indicator that market forces are pushing prices higher. I have written in past months about the high level of competition in Novato’s entry level real estate market. This phenomenon also supports the notion that we have hit bottom.

[Click HERE for the rest of this article, courtesy of www.Novato101.com.]