Welcome to my March 2017 Marin County Real Estate Market Update! While spring is not starting officially for a few more days, spring-like weather certainly has arrived in Marin County. Wherever you look, you can feast your eyes on beautiful trees laden with pink or white blooms. It makes my heart sing! In real estate, the busy spring season has begun as well. To the delight of agents and buyers, a nice crop of new listings is popping up on the market every day, 96 so far today (March 12) compared to 117 for the entire month of February! The market appears poised for a promising listing season ahead.
1. MARIN COUNTY MARKET HIGHLIGHTS AND ANALYSIS
* I have been considering removing the “Peak 2007 Monthly Average” column from my chart because as you can see our sales prices in Marin are now, and have been for quite a while, actually higher than the 2017 prices. Yet, I find the comparison in terms of inventory, number of sales and pended properties, and months supply of inventory useful. So for now, I am going to keep the column as a point of reference.
January and February were notably slow for Single Family Home sales in Marin County. However, it is important to keep in mind that recent sales at the beginning of the year in real estate lag the real trend and don’t necessarily tell us about the current market. Since escrows take one to two months to close, February sales reflect the market activity in December and January: December is always slow because of the holidays and January was even slower than usual this year because of the bad, stormy weather. A more accurate indicator of current market activity is the number of pended listings: it was up significantly in February from January, a telling sign that demand remains very strong.
Here are the main highlights:
- The average number of active listings increased in February by 20 percent. It was flat compared to February 2016’s number, despite a significant drop of 39 percent in the number of new listings, as a result of lower sales activity.
- The number of new listings increased slightly compared to January’s low seasonal number, but was significantly lower than February 2016’s number. The inclement weather and succession of severe storms in both January and February delayed some of the preparations for new listings. In March, we are seeing more listings launched.
- The number of sold properties remained low, and was almost 20 percent lower than last year’s sales in February.
- The number of pended properties (or properties in contract)–the most accurate indicator of how the market is performing right now–jumped 70 percent from February’s low number. This confirms that demand remains high.
- The average sales price and median sales prices were similar to 2016’s prices.
- The months supply of inventory (based on pended properties) decreased compared to January’s number and February 2016’s number because more properties were pended during the month. This means the market absorption is increasing a little. The months supply of inventory (reflecting the market’s absorption rate) indicates how long it would take for the market to absorb current inventory if no new listings came on the market. As a rule of thumb, an inventory level of less than three indicates a strong seller market while an inventory level greater than six indicates a buyer’s market.
What does it mean for you?
- If you are thinking of buying, preparation is more important than ever. In the most competitive (and desirable) neighborhoods, bidding wars, escalating prices and fast sales are the rule, not the exception. You have to accept the fact that you may not be able to check all the boxes on your wish list and get your dream home in this market. You should instead be prepared to make some concessions on location, price, move-in readiness and other factors.
The good news is that the market pace has slowed down. It looks like we should be getting more inventory this spring, but the key is to be able to move quickly. Get pre-approved and set up property searches and alerts on my website or contact me for free access to Real Scout, the best search tool in the industry.
It is more than ever paramount to submit a clean, streamlined offer that makes it easy for the seller to close quickly and meets any particular needs he/she may have. If you are not paying cash, know that all pre-approvals do not carry the same weight. Make sure you work with a reputable local mortgage lender who knows the Marin market and can fully underwrite your loan before you even go under contract. That way the seller knows your financing is secure, and your offer stands a much better chance to successfully compete with all-cash offers.
If you are thinking of selling, preparation is key as well. Make sure your home and yard look as good as possible, and consider staging. While inventory remains relatively spare, it does not mean you can overprice your home and get away with it. Price your listing based on recent comparable sales, not the 2015’s high price your neighbor sold his home for. I am happy to provide a free, no obligation consultation on improvements with the best return on investment to make to your home whether or not you are ready to sell this season. Feel free to contact me.
2. THE BIG PICTURE
While it is important to remember that real estate values are hyper local in nature, and that they move up and down with the local supply and demand for similar types of housing, they are also influenced by national and regional factors.
Economic Market Overview
Economic optimism prevailed for another month and US stocks hit all-time highs. In the months since the Presidential election, the Dow has continued its rally and broke over 20,000 for the first time.
All indicators improved in February. The labor market continues to march ahead at near “full-employment” and recent readings on retail sales and industrial production were extremely favorable. A survey of manufacturing shows the factory sector is expanding at breakneck pace — a remarkable turnaround for an index that was contracting as recently as August 2016. Indeed, the US economy appears to be firing on all cylinders.
The consumer confidence index increased in February to 114.8 from 111.6 in January.
Of course, more jobs and better wages result in increased consumer spending and ultimately, inflation, prompting Fed Chair Janet Yellen to pledge to increase interest rates at the Federal Open Market Committee (FOMC) meeting. While interest rates remain historically attractive today at about 4.1 percent for a 30 year mortgage, Ms. Yellen did add that the Fed expected to raise rates twice more this year.
The San Francisco Market
Softening demand and increased inventory from new construction have resulted in fewer multiple offers in 2016 than in 2014 and 2015. According to a recent SFCurbed Article, as the real estate site Redfin rolled out its annual list of the neighborhoods with the most competitive bidding wars in the U.S., “the San Francisco’s battlefront [was] looking a bit quiet.” Only three San Francisco neighborhoods made the list: they were Inner Richmond, Dolores Heights and Parkside.
Back in 2014, by contrast, San Francisco commanded seven spots on the list, including the top three: the Sunset, the Castro, and Bernal Heights, and Glen Park, Westlake, Noe Valley, and the Haight further down the list.
But keep in mind all is relative. The fact there are fewer multiple offers, both in San Francisco and in Marin, does not mean the market is not competitive. It was pretty much out of control in 2015, and is more balanced and healthy now.
Marin remains more affordable than San Francisco, and attracts many buyers thanks to its award winning schools and sunny, warmer weather.
The National Real Estate Market
Lawrence Yun, NAR (the National Association of Realtors) chief economist, reports that interest in buying a home is the highest it has been since the Great Recession. According to Yun, households are feeling more confident about their financial situation; job growth is strong in most of the country and the stock market has seen record gains in recent months. While these factors bode favorably for increased sales in coming months, buyers throughout the country are dealing with challenging supply shortages that continue to run up prices in many areas, and deteriorating affordability as the result of higher home prices and mortgage rates.
In Marin, the anemic supply of homes poses an extreme challenge as we are not building new construction because of our no-growth policy. A word of advice to buyers, when you see that perfect house: jump on it!
3. MARIN MARKET STATISTICS AND COMMENTARY
Number of Homes Sold
With 74 sold, Marin Single Family Homes sales were up 1% from January, and down 22% compared to the same month last year. Most Single Family Homes sold in February were in the price range of $1-2 million.
Percentage of Homes in Contract by Area
Greenbrae had the highest percentage of homes in contract in February (67%), followed by Corte Madera (50%) and Novato (49%). San Rafael, San Anselmo and Sausalito had between 41% and 42% of homes in contract. In contrast, less active markets were Tiburon (12%), West Marin (8%) and Kentfield which had none.
Average Price Sold
Sales by Price Point
The highest number of homes both available (72) and sold (28) were between $1-2 million. 25 homes sold priced between $750,000 and $1 million, while 11 homes sold in the $2-3 million price range. There were no sales of homes priced at $4 million or higher.
I hope you have enjoyed reading my March 2017 Marin County Real Estate Market Update. I would be happy to answer any questions you might have. If you are thinking of buying or selling now or later this spring or summer, feel free to contact me today. It is never too early to start preparing to sell your home and I am always happy to sit down with you and provide you with advice on the best improvements to make on your home for the best returns.
Contact me at 415-505-4789 or Sylvie@YourPieceOfMarin.com.
Please note: Unless otherwise indicated, charts were prepared by the Decker Bullock Sotheby’s International Realty marketing department. All reports presented by Sylvie Zolezzi are based on data supplied by TrendGraphix and BAREIS MLS. Neither the Marin Association of Realtors nor its MLS guarantees or is in anyway responsible for its accuracy. Data maintained by the Association or its MLS may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.
About the Author: The article March 2017 Marin County Real Estate Market Update was written by Sylvie Zolezzi. I am an award winning, top producing Realtor specializing in luxury residential real estate in beautiful Marin County, just north of the Golden Gate Bridge.
I offer a wide range of innovative and comprehensive real estate solutions for buyers, sellers and investors, attracting clients who demand excellence—in marketing, negotiations, market intelligence—and a genuine concern for their needs. My association with Decker Bullock Sotheby’s International Realty allows me to provide a high-end luxury experience to all my clients at every single price point. It also empowers me to leverage the unique combination of Sotheby’s global resources, Decker Bullock Sotheby’s International Realty’s growing market share and local knowledge with my unmatched social media networks to provide highly personalized service and unmatched exposure to my clients’ properties locally and worldwide.
I would welcome the opportunity to work with you. I can be reached via email at Sylvie@YourPieceOfMarin.com or by phone/text at 415.505.4789.