Welcome to my Marin County Real Estate Market Update for August 2017!
The market slowed down a little from the high activity of late spring and early summer in July and beginning of August. . I am still seeing multiple offers however on the most desirable properties. Most noteworthy is the 45 percent drop in the number of new listings coming on the market compared to July 2016. Many homeowners are remodeling instead of moving up, or just staying put instead of downsizing. Read my July 2017 Market Update for tips on how to deal with the challenges of our market as a seller. Despite the drop in new listings and resulting decrease in the number of active listings available for sale, the number of sales increased year over year. This is a new trend that started in the spring this year: as the number of active listings has been decreasing, the number of sales has been increasing every month, as compared to the same month in 2016.
This means increased pressure on prices, especially in the lower end of the market, as buyers are competing for a decreasing inventory of homes available for sale in Marin County.
Yet, while some homes are selling quickly and receiving full price, or over the list price, cash offers, others are lingering on the market and only sell after one or more price reductions, especially in the high end. A word of advice to sellers: our market has cooled off since 2015 and 2016. Pricing correctly from the start can make all the difference if you want to secure multiple offers, providing you with more leverage in the negotiations, and helping you sell for the highest possible price.
1. MARIN COUNTY MARKET HIGHLIGHTS AND ANALYSIS
- The average number of active listings decreased slightly in July compared to June, and was 11 % lower than it was in June 2016.
- The number of new listings decreased significantly versus the number of new listings in June, and also compared to the number of new listings in July 2016.
- The number of sold properties dropped from 242 in June to 203 in July. Despite the lower number of new listings and the lower inventory of active listings, sales were up compared to last year. One might expect that the decrease in active listings would choke off sales, but on the contrary, sales are trending up.
- The number of pended properties (or properties in contract)–the most accurate indicator of how the market is performing right now–was down compared to June, but up year over year by 13 percent–a strong testimony that demand continues to be high for Marin County properties.
- The average active (or list) price went down slightly month over month, but was up 4 percent year over year.
- The average sales price decreased month over month. The normal seasonal pattern is for prices to spike in the spring, and again in September, while settling a bit during the summer and winter months as activity wanes. Year over year, the average sales price was up 10 percent.
- The median sales price also decreased month over month, but went up by 3 percent year over year. It is important to keep in mind that while movements in the median sale price and even to a greater extent the average 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. Two or three very highly priced properties can significantly affect the average sales price in a particular month.
- Days on Market went up month over month, and were almost flat year over year.
- The months’ supply of inventory (based on pended properties) increased compared to June’s number and was down 23 percent 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 many properties (I wrote an offer yesterday for clients of mine who were competing with four other buyers), 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.
- it is important to work with an agent who is intimately familiar with market trends and values
- despite the seasonal slow down in our market, I am still seeing some overbids. Our market is still a strong seller’s market.
2.The Big Picture
In July the current recovery reached its eighth birthday (a rarity for modern economic growth cycles). The S&P 500 finished its ninth consecutive month in positive territory. The Dow Jones industrial average passed the 22,000 milestone, and the Unemployment Rate fell to 4.3% from 4.4%, the lowest level since March 2001.
Domestic political turmoil appears to be the new normal but American businesses are thriving against the backdrop of steady economic growth and historically low interest rates.
It is no surprise in view of the above that the Conference Board Consumer Confidence Index®, which had increased in July, improved further in August. The Index now stands at 122.9 (1985=100), up from 120.0 in July and 118.9 in June.
CALIFORNIA HOUSING CRISIS
You may have heard on the news last week about the event organized by the Center for CA Real Estate (CCRE) and the Bay Area Council. Here are some take aways.
Housing affordability dipped to 29 percent statewide and only 17 percent in Marin. We’ve had the lowest single-family residence growth rate in history, employment numbers have shown a 17 percent decrease in hiring velocity and although the public recognizes the need for housing supply, there are many barriers put up by existing communities to keep others out by opposing proposals for new housing, development and change.
According to the panelists, the Bay Area is out of reach for many of those who wish to live here – our children may not be able to afford a home here without our help. Some businesses are migrating out of the area to Seattle, Austin, Denver and Boston.
Talking about affordability, it is important to remember that rising interest rates can have a huge impact on affordability. In an article titled How rising interest rates can decrease affordability more than home price increases, Andrew Le Page of Corelogic explains: “Rising home prices and relatively stagnant wage growth have combined to create affordability headwinds for many Americans. Until recently, however, historically low mortgage interest rates have been one of the few tailwinds helping the average home-buyer. But what will happen now that rates are rising again?”
According to Mr. LePage, if we go back more than a decade, to June 2006, “the inflation-adjusted typical mortgage payment hit a record $1,244, about 47 percent higher than the June 2017 payment. That’s because the average interest rate back in June 2006 was about 6.7 percent, compared with 3.9 percent this June, and the median sale price in June 2006 was $199,900 (or $241,495 in 2017 dollars), compared with $225,000 this June.
The change in the typical mortgage payment over the past year illustrates how it can be misleading to simply focus on the rise in home prices when assessing affordability. For example, in March of this year the median sale price was up 5.9 percent from a year earlier in nominal terms, but the typical mortgage payment was up 12.6 percent because mortgage rates had increased 0.5 percentage points in that 12-month period.”
I thought this was worth sharing and helpful in assessing the situation with the right perspective.
Here are current interest rates this week.
3. MARIN MARKET STATISTICS AND COMMENTARY
Number of Homes Sold
Average Price Sold
Home Sales by Area
In Contract by Area
Sales by Price Point
With Labor Day week end right ahead of us, we are about to enter a period which typically sees revived activity after the summer slowdown. Most people are back from their vacation, many of us agents are busy preparing listings to be launched in the next few weeks. Will there be a big influx of new listings this fall? It is hard to predict, but what is certain is that there are many buyers hoping it will be the case.
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About the Author: The article Marin County Real Estate Market Update – August 2017 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.