Mill Valley Real Estate Market Report (February 2009 Home Sales Update)
Mill Valley real estate is strangely out of sync. Those who read my reports regularly will note that recent months have seen buyers make a concerted downshift. It seems that buyers have shifted into first gear (and I apologize in advance, but you are going to need to reconcile metaphors here) and are taking a few pitches in order to gauge the market. While it is looking like there may be an nominally better tax break in the Stimulus Bill, reports indicate we will not see a $15K tax credit. Whatever happens though, I sense that with the elimination of all the uncertainty regarding what the government is planning to do, we will then gather some traction. I know lots of folks are sitting on the sidelines waiting for the “right time” to buy. I predict they will make their move this year as attractively priced new inventory drives the market forward.
While some buyers believe prices may slip a bit more, most appreciate the fact that interest rates have never, ever been lower (we are back down to 4.75% conforming rates this week). Indeed, mortgage math punishes those who don’t lock in at the lowest rate possible. For example, if prices dip another 5% and interest rates go up just 1%, the monthly payment would increase.
Up just a bit from January 2009, the percentage of homes in escrow under $800,000 rose to 40% (it had been as low as 15% in November). Overall, we currently have enough homes to last 6 months in Mill Valley (this is called the absorption rate). However, if you limit that analysis to homes priced under $1 million, our absorption rate drops to just 3.75 months.
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