Views of Marin – Shady Lane in Ross

Shady Lane is a beautiful tree lined street in Ross. I took this photo this morning in the aftermath of the weekend storms.

Marin Market Update Part 2 – Now for the Nitty Gritty

While it’s interesting to look at trends in the county overall, you get a much more useful picture when you get more specific about just exactly what sort of property you’re talking about. Continuing with some more market stats, we can see there continues to be a dramatic disparity between areas and price segments in Marin County.

Here’s a look at the percentages of Marin properties that entered escrow the last two months by city/town. Convention says these percentages determine the state of the market in that segment, for example 10% or below is considered a strong buyer’s market, while 31%-35% represents a balanced market. Those designations are somewhat arbitrary, but they are useful. Towns like Corte Madera, Fairfax, and Greenbrae remain relatively active, with the supply of homes and demand from buyers somewhat balanced, while buyers in Belvedere and Kentfield are in a much stronger bargaining position since there is so much inventory compared to the number of sales happening.

And here’s a look at activity by price range, where we continue to see a big difference between the entry level segment and higher end luxury homes. For example, only 1 of the 48  listings priced at $5,000,000 or more went into escrow in October, while more than a third of those listed at $500,000 or below found buyers. This is why there has been some stability in prices in the lower ranges, while luxury properties continue to take a hit.

These stats bear out what we’re experiencing anecdotally in the lower price segments. Accurately priced, well prepared homes in desirable areas are selling, and the inventory is drying up as we head into the holidays. This may be a tough time to sell that $8,000,000 mansion in Belvedere, but maybe not such a bad time to sell a charming $800,000 home in San Anselmo or Fairfax.

Marin Market Update

With the holiday season approaching it’s a good time to take a look at what’s happening with the housing market in Marin County.

It was a pretty slow summer, but as you’ll see in the chart below there was a nice uptick in homes entering escrow in October, the most new pendings since the little run of activity that peaked in April. Inventory is ticking down and we would expect it to drop off dramatically in November and bottom out in December as it typically does as homes sell without being replaced by new inventory and sellers pull their properties off the market for the Holidays.

We saw a bit of a glut of inventory overall through the summer, but as you can see from this chart of months supply based on pending sales, supply and demand are closing. And this fits with what we’re seeing, as there have been few homes coming on the market the last several weeks, while buyers are still buying. Inventory could get pretty slim over the winter, which could be a good argument for sellers to buck the conventional wisdom that says you should wait for spring to bring your home on. A desirable, well-priced home can attract a lot of attention in a period with very little competition.

And here’s a look at price in dollars per square foot. I’ve limited it to homes under $3 million, since higher end luxury properties tend to skew the numbers and have been more volatile.

As you can see, Marin residential properties (under $3 million) on average have been bouncing along between about $400 and $440 per square foot for a while now. In fact if we look at a five year graph you can see the big drop in 2008, but then relative stability over the last two years.

Wishing you a Giant(s) Win & a Happy Halloween

I just returned from trick or treating with the kids.   Along the way, we saw lots (and lots, and lots!) of Giants fans, beards and the like.  The energy and excitement over the Giant’s game was thrilling.  I was concerned about missing the World Series, yet people had brought large screen tvs into their front yards, invited us in for beverages and an inning, and generally cheered and updated us on the score. I loved this pumpkin we found.

The Giant sense of community (pun intended), was clearly felt.

And this, is why I love Marin.

Social Media could kill your home purchase or sale

How Social Meda Killed the Deal- Negotiation Killers in the Social Media Age

Facebook, Twitter, LinkedIn- everywhere we go people seem to be tweeting, facebooking or posting status updates on some kind of online group or social network.  Unfortunately, many of these seemingly innocuous updates could cost you as home buyer or seller thousands (or hundreds of thousands) of dollars, if not an entire deal.

Recently I have seen updates similar to these on social networks I participate on:

From a Home Buyer

From a Home Seller

“Looks like we are getting an offer on our house this afternoon. About time.”

From a Seller’s Real Estate Agent

“Sitting at an open house AGAIN.  This listing is totally over priced.”

From a Buyer’s Real Estate Agent

“Writing a counter offer for a client.  Hope they get it.  We have written 5 offers and they have to move next month!”

You can probably see how all of these different scenarios could impact how negotiations happen if the other party (or their agent) happens to see your message.  Do the updates make you appear desperate, motivated, anxious?  As a buyer or seller, your social status updates can have serious and significant ramifications in your home sale or purchase.  Your words in online forums can and will be used against you when you negotiate on a home purchase if you have a savvy and aware negotiator on the other side.  The key in negotiations is knowing the motivations of the other party.  Social status updates of both you and/or your real estate can inadvertently provide information to the other party that could be costly.

Case Study

Consider Jane (name changed for privacy sake).  Jane had been looking for a new home in the lovely town of Mill Valley for eight months.  We looked at home after home until one day, we found the perfect home.  The right number of bedrooms, a lovely back yard with a swingset, even a basement area- perfect for games, television and play.  She was so excited about the home, she ran home to tell her husband.  She also posted an update on her Facebook account about finally finding her dream home in the xxxx neighborhood.  Unfortunately, this neighborhood was highly coveted and one of her Facebook “friends” happened to have another very close friend (we’ll call her Buyer 2) looking to move to the same neighborhood.  This so called friend notified Buyer 2 about the house and at the end of the day, that second buyer, Buyer 2, was the one who walked away with keys in her hand.    Buyer 2’s agent was not aware of the home even being on the market until the Facebook post by Jane was shared.

While in the world of transparency and social networking it might be tempting to talk about the ups and downs in your home sale or purchase, it might pay to keep quiet until the transaction is closed.

“Have to vacuum and clean up the kids toys AGAIN.  So tired of showing this house, I hope we sell it soon.”

While we like to think we have some sort of privacy in online forums, our social networks may not be as tight as we deem them to be.  This same situation applies to our offline activities and interactions as well, but social networks magnify your message, however unintentional it might be.  Use your words cautiously as you make a move- it is possible it could have a significant impact on your bottom line and the success of your real estate transaction.

P.S. Before you hire your real estate agent, you may want to look and see what they are posting on Facebook, Twitter, etc. Do they talk about their clients and transactions?  Even “generic” complaints or comments can harm a transaction.  Sure, they didn’t post the client’s name or address, but hey, they only had one listing!  Which listing do you think they might be talking about?  Yours?  Make sure their words in online forums don’t cost you too!

Marin Luxury Homes Sold Year to Date

There have been 50 Marin homes over three million dollars sold since January 1, 2010.  In the same time frame last year, there were 37 homes over three million dollars sold in Marin. Yes, despite the mortgage mess the overall luxury home market has actually improved since 2009 in terms of number of sales.

As you can see in the chart above, the town of Tiburon tops the list of the most homes over three million dollars sold.  The bulk of the luxury home sales are still under 3.5 million.

Top Ten Most Expensive Homes

The top ten most expensive homes sold year-to-date in Marin are as follows:

Ross 1 Upper Rd Ross, CA 94957 17,500,000 1/15/10 14,000,000
Ross 7 Laurel Grove Ave Ross, CA 94957 10,000,000 1/20/10 8,000,000
Tiburon 3680 Paradise Dr Tiburon, CA 94920 8,800,000 4/2/10 7,800,000
Belvedere 8 Eucalyptus Rd Belvedere, CA 94920 7,500,000 10/19/10 7,140,000
Tiburon 4639 Paradise Dr Tiburon, CA 94920 7,485,000 8/3/10 7,000,000
Tiburon 133 Sugarloaf Dr Tiburon, CA 94920 6,995,000 7/15/10 6,900,000
Sausalito 77 Harrison Ave Sausalito, CA 94965 8,750,000 4/15/10 6,834,000
Tiburon 232 Trinidad Dr Tiburon, CA 94920 7,995,000 3/10/10 6,500,000
Kentfield 65 Rock Rd Kentfield, CA 94904 5,500,000 5/17/10 5,500,000
Mill Valley 401 Lovell Ave Mill Valley, CA 94941 5,695,000 9/26/10 5,500,000

Both the price per square foot and the list price to sales price ratios were almost identical in 2009 and 2010.  What’s to come for the luxury market?  It’s still unclear how the meltdown of the mortgage markets will impact the overall economy and confidence in the real estate market. We’ll be watching carefully to see what’s next.

*information from Bay Area Real Estate Information Services.

Marin & California Housing Market Forecast

2011 Housing Forecast *Mildly* Optimistic

The California Association of REALTORS® released its housing forecast for 2011 earlier this week. As we expected, predictions show very mild improvement overall.

“A lean supply of available homes for sale will drive prices up at the low end, but larger inventories and limited, less attractive financing will cause continued softness at the high end. There’s some indication that lenders will accelerate the number of foreclosures coming on market, further adding to the housing supply, but we do not anticipate that lenders will flood the market with distressed properties,” said Leslie Appleton-Young, CAR’s Chief Economist.

We anticipate that recovery to be very location and price specific in Marin. In September 2010, the number of Marin homes on the market was up 16.6% over September 2009, while sales were down 11.6%. Sales were down almost 15% from the same time period two years ago.

All County Marin County Sales

As we drill down into price ranges you can see the numbers shift pretty dramatically, as we look at homes sold under one million dollars versus above one million.

Marin County Home Sales Under One Million

Marin County Home Sales Over One Million

We don’t expect to see a major shift in these trends as we head into 2011. Homes under one million continue to move as buyers move in to the county, taking advantage of low interest rates. Many homeowners who would traditionally move up to larger houses are staying put. We are starting to see more pre-foreclosures in the upper end, and expect more in 2011. CAR’s predictions are in line with what we expect–sluggish prices and more options in the upper end with continued movement in the lower price ranges.

What does this mean for home sellers? Well, that depends! We hate to say that, but it really does depend on your area, home condition, and how you price it.  We are still seeing the occasional multiple offer situation. Home buyers are picky and expect homes to be in prime condition unless they are a foreclosure situation. Proper preparation and pricing are crucial.

What does this mean for home buyers? Historically low interest rates and low home prices can make it a great time to buy for people with the means to do so, especially those buying for the long term. And for the first time in many years we’re seeing some possible “deals” where numbers actually make sense for investors to buy in Marin.

Considering making a move? Contact us to discuss the best options for you.


Is it Time to Think About Investment Property in Marin?

One casualty of the run up in real estate prices in Marin County in the mid 2000s was that staple of American real estate, the investment property. When home values got to a certain point the numbers just stopped working–no longer was it feasible (without a huge down payment) to buy a starter home or condo and have the rent from a tenant cover your mortgage, taxes, and other monthly expenses. But falling home prices and a fairly consistent rental market have made it possible again, at least for the time being.

For example, 3 bedroom, 2 bath units in Western Oaks III, one of the nicer townhome developments in Novato, have been selling in the mid $300Ks, after peaking around $600K back at the height in 2005 and 2006. They average around 1400 square feet, with 2-car garages, in a nice complex with two swimming pools. If you got one for say $350K and were to put 20% down, with a 4.5%, 30-year fixed loan your monthly outlay including the mortgage, taxes, and HOA dues would total about $2,000. A nice townhome in that development should rent for $2,000 or more per month, which would mean covering your costs or even possibly a little positive cash flow to maintain the unit and/or put in your pocket. This of course assumes you have the extra $70,000 for the down payment, and since you wouldn’t be putting that money in another investment you’d be forgoing whatever return you might have realized somewhere else. But in the right situation it’s certainly interesting to think about, and nice to know the numbers at least are making sense again.

It’s important for anyone thinking about buying a condo or townhome to consider units in better developments, as there are big differences in desirability from complex to complex, and the right property will have more upside. And even within the same complex some locations are better than others. In Western Oaks III for example, units closer to the freeway come with substantial road noise, while those set back from 101 are much quieter.

And of course nobody can predict with certainty what the housing market will do in the next couple of years, though there does seem to be some stabilization in the lower price ranges lately, as buyers have been snapping up distressed properties and the entry level segment has been relatively active. 

Marin County Pending Percentages for August

Time to look at some numbers now that Labor Day has passed and we’re transitioning into what’s traditionally a busy time of year. Overall, Marin home sales slowed down quite a bit over the Summer, but much more in some areas and segments of the market than others.

Here’s a chart showing the pending percentage by city for August, which you get by dividing the the number of new sales each month by the number of homes for sale. A higher number means more demand compared to the supply of homes on the market. As you can see, a few cities in the county were pretty active while other areas were relatively much quieter.

And when you look at the same stat by price range you see that the lower end is much more active than the luxury market.

Well-priced entry level homes are moving, driven somewhat by distressed properties as has been the case for some time now, but the high end market is very sluggish. It’ll be interesting to see what happens this month. There are more listings coming on as expected, but we’ll have to see if sales pick up enough to keep pace.

Finding a deal on homes in Marin

On a daily basis we are getting calls from home buyers looking for a “deal” on homes for sale in Marin.  This could possibly be one of the best times to buy real estate in the last few years.

  • Interest rates are at their lowest point since 1971
  • Home inventory levels are high in most areas
  • Home prices are down in most areas

In August, the median home price was $790,000 for a single family home and the number of homes sold was down 17% from August 2009.

So how do you find a deal and what constitutes a good deal?  Finding a deal takes time, patience, and preparation.  Many clients come to us asking about homes being foreclosed upon.  So what is the difference between a short sale, a home for sale at auction and an REO?

Short sale- A short sale is a home being sold for below what the current seller owes on the property.  The seller does not have other funds to make up the difference at closing. If the lender agrees to accept an amount less than the outstanding mortgage as satisfaction for the debt, the sale is considered a short sale.  Short sales can be “good deals” for the right buyer–one who has patience and time.  Short sales can take 120 days or even longer!  If you don’t have a lot of time, short sales are not for you.

Auction sale- After a property owner has been been given a NOD (Notice of Default) a sale date will be set by the lender, whereupon the property will be auctioned at the courthouse steps.  If no one purchases the property at the auction it is then owned by the bank and it’s typically listed for sale through a REALTOR®.  Buying property at auction can be a risky process, as you are purchasing that property with any outstanding liens and there is no time for inspections.  Buyers are unlikely to know the true condition of the property.

REO- (Real Estate Owned) If the home doesn’t sell at auction, it typically becomes an REO.  An REO is when the seller’s lender has taken back title of the home (the bank now owns it) and is selling it directly through a real estate broker. REOs take considerably less time than a short sale but they aren’t always as good of a deal.  Most REO properties are sold close to fair market value and are sold “as-is” , meaning the bank typically won’t do a lot of, if any, repairs.  Unlike an auction sale, buyers still have the right to perform inspections so they at least know the condition of the property before they buy and can get an idea of how much actual repairs will cost.  Again, the lender is unlikely to pay for them. They are much quicker to close then short sales. If you are buying an REO, you are likely to need some cash reserves to do repairs after close of escrow.

What is considered a “deal” depends on your goals, how much time you have, how much cash you have, and what risks you’re willing to take.