The Piccolo Pavilion in Corte Madera, CA
Welcome to my December 2017 Marin County Market Report! Happy Holidays to you and your family!
Wow, what a year it has been both here in the San Francisco Bay Area and nationally! So much has happened, but I feel most notable here in our local area were the fires in the North Bay. They hit very close to home for those of us living in Marin County and they have taken a significant emotional and economical toll on the region.
Reconstruction will take years, and will have a significant impact on our Marin market. Not that much in terms of increased demand from homeowners displaced from the affected areas: Melissa Prandi, of Prandi Property Management and Rental has only seen a handful of displaced families looking for rentals in Marin, and so far we have not seen many displaced families looking to purchase homes in Marin either. Most families want to stay close to their home as it is reconstructed and keep their children in their current schools. The fires will affect not only the cost of remodeling or rebuilding homes in Marin, but also the availability of contractors and construction workers. Homes in move-in condition will sell at even higher premiums. Furthermore, I expect that homeowners who have in the past few years chosen to remodel their home instead of moving up may consider a move to avoid dealing with the increased challenges of remodeling or expanding their home. It will be interesting to see how this all turns out, and an influx of much needed new listings to reverse the trend we have seen this year of decreasing new listings every single month would be most welcome!
1. MARIN COUNTY MARKET HIGHLIGHTS AND ANALYSIS
I have said in all of my recent market report this year: we are continuing to see a consistent trend in our Marin County real estate market of a decreasing number year over year of homes available for sale, of new listings, shorter days on market, and an increasing number of sales, as well as an increase in prices.
Marin County’s high desirability will continue to drive demand while the number of homes available for sale is likely to remain low due to zoning that demands lower development densities and a low number of new listings coming on the market. We can expect prices to remain high in the new year. However, let’s pay attention to the recent trend of price reductions as buyers have been pushing back when sellers try and push prices higher.
Here is a snapshot of market activity in Marin in November:
- The average number of active listings decreased slightly compared to October, a normal seasonal trend, and dropped 3% compared to November 2016.
- The number of new listings decreased significantly compared to October and dropped by 15% compared to November 2016. This has been a consistent 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%, August -39%, September -12%, October -14% and now -15% in November.
- The number of sold properties, after taking a tumble in October, jumped back up in November and was 34% higher than in November 2016.
- The number of pended properties (or properties in contract)–the most accurate indicator of how the market is performing right now–dropped from 209 in October to 145, and was down 15% compared to November 2016.
- The average active (or list) price was up month over month, and flat year over year.
- The average sales price decreased slightly month over month, and was up 13% compared to November 2016. 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.
- The median sales price dropped a little month over month, and went up by 14 % 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.
- The average price per square foot was up 15% compared to November 2016.
- Days on Market was up by 3 days compared to October 2017, but decreased significantly from 65 days in November 2016 to 43 days, a 34% decrease year over year.
- The months’ supply of inventory (based on pended properties) decreased from 1.8 in November 2016 to 1.5, a 17% drop. 1.5 months supply of inventory is extremely low: 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.
Here are your best strategies in today’s market:
Buyers: The Marin market remains extremely competitive with demand outstripping 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: Despite the seasonal slow down in our market, I am still seeing some overbids. Our market is still a strong seller’s market.
- Please keep in mind however that while the market this fall is less slow than it typically is during some fall seasons, it remains very price sensitive. Marin County buyers are logical, well-informed and no longer so desperate as to offer any amount. My advice? Don’t just look to the high sales from 2015 or from the beginning of 2016, or even this past spring and summer. Rather focus on what is getting into contract right now, what is sitting, what is being withdrawn from the market? That will give you a good picture of the current market and a hint for how to price too (possibly lower than the height of spring / summer).
2. THE BIG PICTURE
A. The National Real Estate Market
The Marin real estate market has similarities with other markets throughout the country, but is also very unique. A little perspective is always important to understand what drives our market and how it is different from others. The lack of inventory is not just a Marin/San Francisco Bay Area phenomenon. Just like here, the uptick in demand and low supply of homes for sale throughout the country has resulted in competitive bidding and an increase in prices. You may have read or heard on the news forecasts of higher inventory for 2018 and increased affordability nationally thanks to increased construction of new homes. According to Realtor.com Chief Economist Danielle Hale, however, buyers won’t receive a break from excessive home prices in the immediate future as the new homes will take time to be built.
“The pick-up in new home sales (up 6.2 percent month-over-month between September and October 2017) should improve builder confidence and lead to more home construction, offering home buyers additional options and creating opportunities for current owners to trade into new homes, potentially unleashing existing home inventory,” said Hale in a statement.
It is important to remember that in Marin, as mentioned earlier, 85% of the County is not developed and we have very strict zoning laws which very tightly control new construction, and therefore cannot expect relief from new construction.
B. THE ECONOMY
The now longest stock-market boom in American history continues with investors cheering the prospect of deep corporate tax cuts and the rollback of government regulations under President Trump. The three major stock indexes: DJIA, S&P 500, & NASDAQ all measured record highs, again.
Stock gains have help create $5.4 trillion in value since Election Day and The Federal Reserve reports rapidly rising home prices have attributed to home equity levels reaching all-time highs at $13.9 Trillion, up $500 Billion from its last 2006 peak.
Add to this a job market which has steadily increased for 85 months and it is no wonder the Consumer Confidence index registered its highest reading in 17 years. The Conference Board Consumer Confidence Index®, which had improved in October, increased further in November. The Index now stands at 129.5 (1985=
The Federal Reserve’s favorite inflation gauge rose 1.4% and remains below its 2% target range. Despite low inflation, the Federal Reserve raised rates on Wednesday, December 14 by a quarter of a percentage point, as anticipated, but left its rate outlook for the coming years unchanged even as policymakers projected a short-term acceleration in U.S. economic growth. The move, coming at the final policy meeting of 2017 and on the heels of a flurry of relatively bullish economic data, represented a victory for a central bank that has vowed to continue a gradual tightening of monetary policy.
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
Here you have it! Stay tuned for my annual report on the Marin and San Francisco Bay Area market. I am here in December, feel free to reach out with any question you may have about the market. Again, my best wishes for Happy Holidays and a fantastic New Year!
If you don’t already follow me on social media, join the 7,500 people who LIKE my popular YourPieceofMarin Facebook Page. If you live,work or aspire to live in Larkspur, LIKE my LiveInLarkspur page for information on the community and the real estate market.
About the Author: The article December 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.