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

Over the past year, my reports have continually pointed to simple supply and demand indicators in an effort to define a “normal” Marin County real estate market. As noted a year ago, “recovery to a normal market will require stability in financial markets, a strong local employment trend, affordable interest rates and strengthening consumer confidence.”  

Reflecting on the past twelve months, Marin County real estate markets experienced the most difficult and unpredictable dynamics. The financial markets imploded, unemployment trends accelerated and consumer confidence was shattered. And while we benefit from historically low interest rates, credit requirements, approval guidelines, and loan to value ratios are as stringent as in recent memory.

The good news is that over 1,100 single family homes have sold in Marin County in the first nine months of 2009. Successful sellers have processed market dynamics, followed their real estate advisors recommendations and successfully made housing decisions to support their lifestyle. Buyers continue to seek opportunity and will write offers only on the homes that have balanced the best pricing in relation to the relevant and recent neighborhood comparables.

Over 70% of the 1,100 single family homes sold in 2009 closed for under $1 million. Approximately 50% of these 1,100 homes closed in San Rafael or Novato. The velocity of the market under $1 million and in San Rafael and Novato may be the only growth sector in Marin County real estate. The chart below illustrates summary market trends by price point.

YTD Sep ’09 v YTD Sep ‘08

Jan 1 – Sep 30, ‘09	$500K – $1M	$1 Million and Up	$1 – $3 Million	$3 Million +
Volume	+12.15%	-50.23%	-48.05%	-56.64%
Units Sold	+12.99%	-47.18%	-46.47%	-53.62%
Average Price	-0.81%	-5.82%	-2.95%	-6.51%
Median Price	-1.89%	-2.70%	-1.06%	-21.71%
Days on Market	+25.00%	+43.66%	+49.25%	+12.00%

 

The average number of days on market has trended over 100 days for 2009. This trend is indicative of sellers’ “hoping” to get a specific price for their home — these hopes are often based on what they paid for it or what they “need” to sell it for in order to maintain lifestyle choices.

Unfortunately “days on the market” is not a seller’s friend. Homes that sell within the first 90 days of a listing enjoy pricing within 7% of the list price. Homes that sell between 90 – 120 days on the market close at a 15% discount and those over 120 days on average are discounted 22% at closing. At Morgan Lane we pride ourselves by providing our clients with balanced advice and recommendations. Indeed, our approach and counseling this year has delivered Marin County’s finest average days on market results — just 64 days.

For home prices over $1 million in Marin County, Sellers need to be exceptionally realistic and sensitive to our market conditions. Volume (units and dollars) is off approximately 50% YTD as compared with 2008 and over 60% from 2007. Buyers enjoy a fabulous selection of listings in all neighborhoods and are extremely discerning. Collectively, we are finding that buyers only act with a sense of urgency if a home is “one of a kind” (where the market sees one such home every few years or if the price is perceived to be below market value). In light of the above, days on the market analysis, why would a buyer act with urgency if time on the market generally translates into a 7% to 22% discount?

We are experiencing a modest increase in activity in the high-end of the market (over $3 million). In Q1 & Q2 2009 we closed eight and nine homes over $3 million respectively. This activity increased to 15 closings over $3 million in Q3 ’09. There are nearly 110 listings in Marin over $3 million and only 5 are in contract. Once again, a seller must be most realistic in pricing to attract "real buyers."

The chart below shows a 90-day rolling average of Mill Valley’s new listings and absorbed listings (e.g., sales), comparing current numbers with those of last year. Note that the while the numbers for new listings are about the same, the number of absorbed listings is a fraction higher than this time last year. If you would like to review a similar chart for any other town or city in Marin or San Francisco, please let me know.

Overall inventory has dipped to 762 single family homes for sale (we had about 757 last month) in the Highway 101 corridor (this number excludes Western Marin inventory and condos). 

For a detailed executive summary similar to, but much more detailed than below, providing statistics and trends relating to the Marin real estate market (or any specific zip code), contact me any time. 

Kyle Frazier, Christie’s Great Estates Marin | Morgan Lane International Real Estate at (415) 350-9440, [email protected]. It is always my pleasure to be of service.

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

The good new is that it seems the media has turned a corner on its reporting of the U.S. and worldwide economies, as well as the housing market. Positive press coverage has permeated all forms of media and is certain to change the tide, although it will take time. Significantly, San Francisco agents are reporting a significant surge in sales and prices. We know from past experience, that once San Francisco recovers, surrounding communities recover in a geo-concentrically expanding fashion.

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

Belvedere and Tiburon sit on the Tiburon Peninsula and associated islands, just across a narrow portion of the San Francisco Bay and the Golden Gate Bridge. Real estate is expensive. Several homes each year sell for $5 million and up. As 2009 began to unwind, the luxury sector was flat for obvious reasons and it seemed as though the highly valued luxury homes with jetliner views and royal class appointments would never sell again — that has changed. For three months straight we have experienced sales above the $5 million mark. 

Nonetheless, sales and activity remain choppy. There are currently 109 listings in the 94920 zip code, which covers Tiburon and Belvedere (down 4 from last month). Twenty-one of these properties are priced over $5 million. In the lower price segments, activity is tepid. There were just 6 sales in September 2009 — 4 of these homes were priced under $1 million. Meanwhile, there are currently 30 properties listed for sale under $2 million.

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. In contrast, Tiburon’s asking prices have actually increased to the point they are nearly equal to those of a year ago — of course, these are asking prices, not sales prices. 

 

For homes that sold in September 2009, the average price per square foot was $815 — far above last month’s $674. Below are the percentages of homes in escrow in each of the major price bands:

 

• 9% of homes priced under $2 million (down from 19% last month);
• 10% of homes between $2 million and $3 million (up 2% from last month);
• 12% of homes between $3 million and $5 million (up 9% from last month);
• 13% of homes between $5 million and $10 million (up 13% from last month);
• 0% of homes between $10 million and up (same as last month).

Tiburon and Belvedere homes that sold in September 2009 exhibited the following characteristics:

• Number of Sales: 6
• Average Days on Market: 293
• Price: $2,754,167
• Square Feet: 3,291 
• Price per Square Foot: $815

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 Broker, Certified Residential Specialist (CRS), and Certified Luxury Home Marketing Specialist (CLHMS) with Christie’s Great Estates | Morgan Lane International Realtors. 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] 

San Rafael, CA Real Estate (October 2009)

San Rafael, California’s real estate market continues leaning heavily on foreclosures and short sales for volume. The entry level price band (under $600K) remains at a slow boil with 64% of home are now in escrow, same as last month. Meanwhile, the $600K to $800K price band (a mix of entry level and move-up homes) rose to 38% of homes in escrow from 31% in September 2009).

It is no secret that our current real estate environment favors buyers, not only because of the state of the market (e.g., prices back down to 2003 levels in many cases), but also because of superior interest rates, FHA loan availability (allowing purchase loans up to $729,000 with 3.5% down), and a shifting mindset by both buyers (who are ready to pull the trigger) and sellers (who are ready to do what it takes to sell).

Housing inventory for single family homes in San Rafael fell to 154 homes (from 169 last month). It is interesting to note that while San Rafael’s inventory has risen and its percentage of homes in escrow has dropped, Novato (the next city north) has experienced the opposite. In fact, in the move up market, Novato sales rates eclipse San Rafael’s by a long-shot.

As reported this Summer, San Rafael listing prices experienced a brief rise, but that trend has reversed and resumed its downward trajectory. By comparison, asking prices in Novato have been rising for several months, leading many to believe 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 report, courtesy of www.SanRafael101.com.]

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

“Give Yourself a Raise. Move to Novato.”

Entering into the dormancy season for Marin County real estate, it appears that certain “hotspots” remain — Novato is one of them. In September 2009, 35 Novato homes sold, compared with 38 sales in August 2009. The Novato real estate market derives its strength from entry level home sales. The number of homes actively listed in Novato remains very low compared with the rest of Marin (and the percentage of homes in escrow is much higher than the rest of Marin) because of exceptional demand based on affordability and the ongoing fantastically low interest rates.

While the average sales price of Novato homes rose in August to a remarkable $713,440 (based in large part to the makeup of sales), that number fell back to Earth in September — $646,389. Even so, the psychological impact on buyers waiting for bottom to hit has begun to register. Anecdotally, I can attest that many buyers are looking at the inventory of homes in Novato and acknowledging that prices in the lower price bands are level and that it is increasingly difficult to identify “turnkey” homes under $525,000 — $550,000.

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

Importance of Listing Prices on Sellers’ Net (Mill Valley Example)

Barring special circumstances, there is generally nothing more important to sellers than the net amount of funds they retain when their home is sold. As every real estate professional will attest, pricing correctly for the market at the outset of the listing period is far and away the most important factor in the sales process — as they say, "price conquers all buyer objections."

Each year in the real estate industry, numerous books are written, classes are taught, and sermons are delivered on the topic of pricing. Managers implore their agents to advise their clients about the dangers of over-pricing and agents natter on amongst themselves about the importance of this element of the home sales process.

Nonetheless, homes come on the market that are overpriced based on recent market data. And this injures not just the sellers, who end up netting less on the sale of their home, but it collaterally hurts the listing agent’s reputation, the neighborhood’s reputation, and the morale of buyers and sellers (who are understandably frustrated by incorrect pricing, although for different reasons). 

The image below is a snapshot of just how big a hit sellers take when they price incorrectly in the Mill Valley, California real estate market for homes between $1 million and $2 million (based on sales from January 1, 2009 to October 7, 2009).

For example, if a home sells within the first 30-days, those sellers received an average of ~97% of list price. I think all would agree that is a great result! At the other end of the spectrum, homes sitting on the market for over 120-days, sold for 82% of list price. Those are startling figures.  

Let’s do a touchstone example with easy math — we have a house that I estimate should sell for about $1 million. 

• Option 1: The sellers go with my suggested list price of $1 million — because it is priced approprately, it sells after the 1st open house for $997,000 (e.g., 97%).
• Option 2: The sellers decide to list it at $1.1 million (to test the market and/or to allow "wiggle room" in negotiations) and it takes 5 months to sell — eventually, it sells for $902,000 (e.g., 82% of list price).

The takeaway: By pricing correctly at outset, not only do the sellers net $95,000 more for the sale of their home, but they also avoid the massive inconvenience of prolonged marketing (open houses, showings, and general anxiety — and you can’t put a price on that). 

By: Kyle Frazier, CRS (Christie’s Great Estates | Morgan Lane Marin Real Estate). Kyle is a Certified Luxury Home Marketing Specialist and is available for counselling and selling services in Marin County, California.