Welcome to my June 2017 Marin County Real Estate Market Update!
Summer will officially begin on June 21, but it already feels like it has arrived in Marin County! School is out, and graduation season is in full swing. At this time of year, our real estate market typically slows down a little after the busy spring months. Sales are often at their highest in June as a result of the peak in activity in April and May. During the summer months fewer homes come on the market and go in contract as the rush to secure a new home for families with school age children lets up and many are away on their summer vacation. September generally sees a second wave of more intense activity.
As is the case in most of the country, the lack of inventory in Marin County remains the major challenge. Yet there are opportunities to move up, or downsize. Determined and resourceful buyers and sellers are succeeding in this market.
1. MARIN COUNTY MARKET HIGHLIGHTS AND ANALYSIS
In 2014 and 2015, the norm was systematic multiple offers, or even pre-emptive offers, non-contingent offers (i.e. offers without inspection or financing contingencies), and a seven to ten-day period from the first day on the market to the offer deadline date. Sellers were benefiting from bidding wars and prices went up significantly. In 2016, and this year again, while demand has remained high, we have been seeing more push back from buyers on price, and as such, more price reductions–especially in the $2 million plus price range. As a result, despite a very limited supply of homes for sale, prices have leveled off. Here are the main highlights:
- The average number of active listings increased in May compared to April, as is the case every year when our market switches into high gear after the slower winter months. However, the number of active listings was 5% lower than it was in May 2016.
- The number of new listings decreased compared to April, but was significantly lower than last May.
- The number of sold properties was a little higher than in April. Year over year, the number of sold properties remained almost flat despite the lower number of homes for sale.
- The number of pended properties (or properties in contract)–the most accurate indicator of how the market is performing right now–was up month over month, and year over year–as demand remains high for Marin County properties.
- The average active (or list) price went down slightly month over month, but was up 4% year over year.
- The average sales price increased month over month, and year over year.
- The median sales price remained flat month over month, but went up by 13% year over year. It is important to keep in mind that while movements in the median sale price are a great measure of what’s selling, they’re not necessarily an accurate measure of appreciation or changes in value and are extremely susceptible to changes in mix.
- Days on Market remained relatively flat month over month, and year over year.
- The months’ supply of inventory (based on pended properties) remained flat compared to April’s number and was down year over year, a reflection of the increased level of absorption as demand continues to be higher than the supply of Marin homes for sale.
Here are your best strategies in today’s market:
Buyers: The Marin market remains extremely competitive with demand remaining higher than supply. Understand that is is a tough market, not the type of market in which anything is going to feel like “a deal.” There are still multiple offers on prime properties, and homes selling for significantly over the list price. However, I am seeing more price reductions, as sellers are meeting with resistance when they try to push prices higher. The advice I always give aspiring homeowners bears repeating:
- seek a pre-approval from a local, respected lender who can, and will, move fast
- know what your budget and limits are
- be prepared to make a decision fast and write your highest and best offer first, you probably won’t get a second chance
- begin discussions early on about your housing wants and needs with a savvy Realtor who knows how to navigate this market
- consider listings that have been on the market for a while: sometimes they don’t sell because they are overpriced, or they don’t check all the boxes. They might offer you the opportunity to make an offer with less competition and a very motivated seller.
- finally, listen to your agent: price is definitely very important to sellers, but you can make your offer attractive through other terms. A savvy agent can guide you and help you win. I just helped two buyers present the winning offer as they were competing with other eager buyers and close on their dream home after a short, smooth escrow. I would be happy to help you too!
Sellers: Buyers have access to more and more market information and are working with savvy agents who are very knowledgeable of values. As I mentioned it above:
- overpriced homes are not selling in our market
- as prices are leveling off, it is paramount to price your property correctly from the onset to ensure you sell it for the highest possible price.
- now’s the time to move quickly before the summer lull hits. That’s especially true if your home will be priced above $2 million.
2. THE BIG PICTURE
While it is important to remember that our Marin County real estate market is hyper local in nature, and that it moves up and down with the local supply and demand for similar types of housing, it also takes its cues from what is happening at the regional–especially the San Francisco and Bay area markets– and national levels.
The San Francisco Bay Area Market
The Marin market tends to track the San Francisco market, generally moving at a slightly more moderate pace. While single family home values increased in Marin by over 40% from 2012 to 2015 (read my May 2017 Marin County Real Estate Market Update for more details), the median price of a single family home in San Francisco increased during the same period by around 70% as we came out of the Great Financial Crisis. Condominium prices increased by around 55% during the same period. While the San Francisco market leveled off in 2016, just like the Marin market, this spring buyers came back to the market in droves and the San Francisco market has heated up again.
Meanwhile, as prices keep going up, the more affordable southern and western neighborhoods like Central Sunset, Sunnyside, and the Excelsior are seeing big gains as buyers are priced out of their first and second choice neighborhoods.
It will be interesting to see if our Marin market heats up as well in the upcoming months.
Economic Market Overview
Despite weak economic growth, the housing market got off to a good start in 2017 thanks to low inflation, record low unemployment (4.4%) and strong job growth.
Consumer confidence decreased slightly in May, following a moderate decline in April, according the recently released Board Consumer Confidence Index report. The headline number of 117.9 was a decrease from the final reading of 119.4 for April, a downward revision from 120.4. However consumers, while less upbeat than in April, overall remain optimistic that the economy will continue expanding into the summer month.
Interest rates have been a bit of a surprise, drifting down since March, helping bolster housing demand.
A recent KCM article reminds us that, at the beginning of 2017, housing experts all agreed on one thing: 2017 was going to be the year we would see mortgage interest rates begin to rise. After years of historically low rates, and an improving economy, the question wasn’t if they would increase but instead how much they would increase. Some thought we could see rates hit 5-5.5% by the end of the year.
However, the exact opposite has happened. Instead of higher rates as we head into the middle of 2017, we now have the lowest rates of the year (as reported by Freddie Mac). Here is a graph of mortgage rate movement since the beginning of the year:
The thirty year jumbo rate is currently at 4.125%.
What can we expect moving forward? The Fed is expected to raise rates at its next meeting this week, and four major entities (Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors) are still projecting that rates will increase by the fourth quarter of the year.
I don’t have a crystal ball and am not certain of what will happen. However, it is worth remembering that a fluctuation in interest rates can greatly affect your purchasing power, as illustrated in the chart I created below:
3. MARIN MARKET STATISTICS AND COMMENTARY
In Contract By Area
San Anselmo had 52% of Homes in Contract in May, followed by Greenbrae (50%), Mill Valley (42%) and San Rafael (41%). Eight cities had over 25% of Homes in Contract. In contrast, less active markets were Belvedere (21%) and Kentfield (17%).
Home Sales by Area
Novato, San Rafael and Mill Valley continue to see the highest number of homes sold at 44, 39 and 33, respectively. Tiburon had a notable number of homes sold at 14, while Greenbrae and Larkspur saw a slowdown in number of home sales compared to previous months, each at 5.
Sales By Price Point
The highest number of homes both available (137) and sold (97) were in the $1-2 million price range, which continues to be the most active in our market. There were 45 homes sold between $750,000 and $1 million, while 30 homes sold in the $2-3 million price range, up from 22 homes in April. A notable nine homes sold between $4-5 million. There were only 2 homes sold at $5 million or higher.
I hope you have enjoyed reading my May 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 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 Golden Gate 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 June 2017 Marin County Real Estate Market Update was written by Sylvie Zolezzi. I live in Marin, work in Marin and LOVE Marin!!! 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 Golden Gate 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, Golden Gate 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.