Welcome to my September 2017 Marin County Real Estate Market Update! Indian summer in the San Francisco Bay Area, including Marin County, is a season in its own right. Karl the Fog makes fewer appearances, and we enjoy some of the best weather of the year: warm, clear and dry. The distraction of summer and slower pace of its lazy days with less traffic has been replaced since school started again with the excitement of a new school year and new season. Fall is sneaking up on us, we sense something in the air, notice the trees are already turning orange, crimson and gold. I love it! Yet I am not ready for everything pumpkin and the rebel in me keeps me wearing my favorite white jeans on warm days like today.
On the real estate front, the market has taken a turn since Labor Day and we are finally, and thankfully, seeing more new listings: close to 300 new single family home listings in September compared to 129 in the entire month of August. Typically the fall season, between Labor Day and Thanksgiving, is the second busiest of the year after spring/early summer in our Marin County market, with on average 25 to 29 percent of the sales: in 2016, 25.6 of sales took place during that period. This year, demand remains very high for the lower end of the market: I wrote an offer for some buyers today on an entry level property in San Rafael, and their offer was one of nine offers! There appears to be a limitless pool of buyers at all price points at different levels of motivation and frustration. More buyers are competing with each other because the economy is strong, employment rates are robust, incomes are up, and low mortgage interest rates persist. However, it is a bit a tale of two markets because the high end market –properties over $4 million–has slowed down a little.
Overall, the trend I am noticing in our market is a combination of fewer and fewer new listings, and sustained or increased sales. As you can well imagine, the result is a smaller and smaller pool of active listing and a rock bottom months supply of inventory. Read on to find out more.
Whether your home is too small for your growing family, or too large for you as empty-nesters, now is very opportune time to sell. Worried about the timing of the sale and purchase, preparing or emptying the home before coming on the market? I can help you overcome these hurdles. I can introduce you to smart, creative lenders who can help you leverage the equity in your home for your next purchase, and teams of professionals to help you declutter and prepare your home. Don’t hesitate to call me for a free, no-obligation consultation.
1. MARIN COUNTY MARKET HIGHLIGHTS AND ANALYSIS
- The average number of active listings decreased slightly in August compared to July, and was 16 percent lower than it was in August 2016, a significant drop! This year over year decrease in the inventory of active listings has been a trend since April this year, with active listings down compared to the same month last year as follows: April: -4%; May: -5%; June: -8%; July -11% and August -16%, the highest decrease to date this year.
- The number of new listings decreased significantly versus the number of new listings in July, and also compared to the number of new listings in August 2016. Again, this has been a trend this year: new listings have been decreasing year over year every single month in 2017, as follows: January: -42%; February: -39%; March: -30%; April: -29%; May: -5%; June: -16%, July: -45% and August -39%.
- The number of sold properties dropped from 210 in July to 175 in August. Despite the lower number of new listings and the lower inventory of active listings, sales were on par with last year’s sales. One might expect that the decrease in active listings would choke off sales, but as demand remains very high, sales have been trending up.
- The number of pended properties (or properties in contract)–the most accurate indicator of how the market is performing right now–was up compared to July, and up year over year by 7 percent–a strong testimony that demand remains high for Marin County properties right now.
- The average active (or list) price was up month over month, and was up 16 percent year over year, reflecting the fact that our higher priced inventory is increasing in relation to the lower end.
- 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 7 percent.
- The median sales price increased very slightly month over month, and went up by 1 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 increased month over month, and also year over year.
- The months’ supply of inventory (based on pended properties) decreased compared to July’s number and was down a whopping 30 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. 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.
When I chat with my colleagues from San Francisco, I notice they are always measuring the performance of their market based on the number of “overbids,” i.e. the number of properties that sell over the list price. It sparked my curiosity, and I did some research to see how our Marin market measures up in terms of the number of “overbids.” See the chart below:
What does it mean when a property sells for a significant amount over the list price? It can mean that the seller priced the property strategically low to attract multiple offers and initiate a bidding war. It can also mean that there are many more buyers searching for this type of property than there are offerings. Often, it is a combination of the two.
Here are some examples of the properties that sold for a high percentage of their asking price:
This large estate property perfect for equestrian use was originally listed for $1,650,000 and sold for $2,700,000, or 164% of the original list price.
This oak studded, gated, knoll top property was originally listed for $1,795,000 and sold for $2,400,000, or 134% of the original list price.
This rare and unique historic Tiburon home with an abundance of Edwardian architectural details and stunning views was listed for $2,250,000 and sold for $3,300,500, or 147% of the original list price.
Here are your best strategies in today’s market:
Buyers: As you can see from the above statistics, 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 and homes selling for significantly over the list price. Many sellers are pricing their homes well below the price they actually want to sell their home for in the hope of creating a bidding war. For highly desirable properties, it works well most of the time. Although I have seen instances when the listing agent receives indications that there will be several offers and in the end does not receive any. How to best navigate this market? The advice I always give aspiring homeowners bears repeating:
- seek a pre-approval from a local, respected lender who can, and will, move fast. Working with a lender who can underwrite your loan upfront can help you compete with all cash offers. Call me to find out more about this.
- 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, i.e. a counter offer from the seller
- 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 increase in inventory in our market, I am still seeing some overbids. Our market is still a strong seller’s market.
- pricing correctly out of the gate is paramount. Make sure your list price reflects the location, condition and presentation of your property. Consider staging as it makes your home show well and photograph well, and will help make it stand out online…where buyers will see it first.
2.The Big Picture
According to a recent New York Times article, the current recovery is showing unexpected vigor and, as it is entering its ninth year, outlasting the eight year cycle to which we have become accustomed. The economy grew at an annual rate of 3 percent in the second quarter of this year, a substantial improvement over the lackluster 1.2 percent growth of the first quarter, and the best showing in the past two years. The improved performance and acceleration in spending suggests that the so-called “Trump bump”—improved sentiment among consumers and more optimism among business leaders—may be translating into concrete actions like homeowners buying new appliances and companies investing in new software or equipment.
“The consumer is in the driver’s seat in terms of economic growth,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “It puts us on a stronger path going into the third quarter, although Hurricane Harvey introduces some uncertainty.”
Talking about consumers, consumer confidence remains high: 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 101. 1 in August 2016.
At a very enlightening presentation at the Marin Association of Realtors last meeting, economist Dr. Robert Eyler echoed the same sentiment. According to him, there is no prediction for a recession until at least 2020, and when the slowdown does occur, it will be gradual. We have had a slow and steady growth over the past few years, and any recession will be mild as well. As far as other economic conditions, he reports that poverty rates remain a concern and there’s growing income and wealth inequality. Dr. Eyler also cautions that drought conditions in California remain, and without an abundant rain season this winter, we’ll be right back into it. My 2016 article Five Things You Need to Know to Rock your Drought Tolerant Garden is still very relevant!
With respect to Marin county real estate prices, he stressed that they will always remain high because of our no-growth policy and consistent high demand which combine to maintain a strong imbalance between supply and demand for housing.
Tensions with North Korea, the uncertainty about Trump’s tax plan and hawkish remarks from Fed Chair Janel Yellen all conspired to move rates up in the past few days. They are still historically low however.
I hope you have enjoyed reading my September 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 this fall/winterl or next spring, 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: 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 guarantee or are 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.
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About the Author: The article September 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.