The three most dynamic economic drivers of residential real estate in Marin County are jobs, interest rates and the equity markets. Marin County’s employment rate of 91.4% continues to outperform the San Francisco Bay Area, state of California and USA averages. As a result, we remain confident that as our clients feel more secure about their businesses, incomes and investments, our real estate markets will continue to respond in a favorable way. For at least the first half of 2011, we also expect to benefit from historic low interest rates and the current momentum of the equity markets.
One element that seems to have frustrated the growth of our local markets in 2010 was the equity markets. This volatility created some pockets of buyer hesitation throughout the year. Our real estate markets had a healthy spring and early summer and a slower than expected late summer and early fall season. These trends have trailed the volatility in the equity markets, and we are now experiencing the related benefits of an appreciating market. Activity in late fall picked up distinctively in all price points.
The Dow Jones Industrial Average experienced four separate drops of over 600 points each in 2010 before finishing the year with momentum at nearly 1,000 points above the beginning of the year stats. We look at this momentum into 2011 as positive and expect employment to respond accordingly in Marin and the San Francisco Bay Area.
Translating the above volatility in Marin residential real estate, we find the 2010 results to represent an encouraging sign that our volume ($ of closings) and units (# of closing) have formed a stable “bottom”. Volume and units over $1 million are up a healthy 20% – 26% while average and median prices are relatively flat. For the first time in three years nearly all of our meaningful real estate trends are well off the lows of 2009 which were, on average, 35% below 2008.
In 2011, we will look for further increases in volume/units sold and modest appreciation over 2010. This positive market activity will likely be driven by two strong phenomena. First, a return of move up buyers looking to combine the price stability on the sale of their existing home with historic low interest rates to assist in the purchase of a new home. Second, the stability of the equity markets will have a positive impact on high net worth individuals and in turn, will drive further activity in the “high-end” (over $3 million) of the market. Both of these occurrences will have positive impacts on our market. Our 2011 outlook is positive. We anticipate an increase in inventory through the first quarter and the buyers already seem to be active and looking for the right opportunity. Please feel free to call me to discuss your specific real estate or mortgage needs.
Spring is around the corner and activity is already high at our new home development in Novato. As noted below, the percentages of home in escrow remain fairly high despite the seasonal slowdown — 44% of Novato homes under $1 million are in escrow!
If you desire a list of Marin County’s best deals or more specific analysis of your neighborhood, please give me a call at (415) 350-9440. My name is Kyle Frazier. I am a J.D., Broker, Certified Residential Specialist (CRS), and Certified Luxury Home Marketing Specialist (CLHMS) with Christie’s Great Estates | Pacific Union International Realtors. It is always my pleasure to be of service.
