The Marin County housing Market in Review

Let's review the Marin County, California housing market for 2006. After four straight years of soaring prices and robust sales, The Marin County housing market - like real estate throughout the nation - is finally starting coming back down to Earth in 2006. While still strong, we began to see a "normalizing" of the local market, one that will likely continue into 2007, according to industry economists.

With median prices in Marin surging 15-20 percent or more each year since 2002, it might have been easy to forget that real estate is a cyclical business. And while we all savored the sharp run-up in the equity of our homes, we knew deep down that these double-digit price increases just couldn't be sustained without risking the long-term health of the housing market.

What we've seen in 2006 is a return to a more normal market, albeit still a very solid one. Open homes continue to be crowded and buyers are still out there looking, but some have been a little slower, a little more cautious to jump into the fray. As a result, we're not seeing the same frenzy we saw in previous years, with homes taking a little longer to sell and fewer attracting multiple offers.

Nonetheless, the average sale price in Marin held its own this year at $1,088.609 through the fourth quarter of the year, about the same as last year's robust seller's market. Sales are off less than 1 percent from 2005 to 2006 year, but still within a normal market range. And it took an average of 75 days to sell a home in the county, 22 days longer than last year but less than historical averages.

Nonetheless, over the long term, residential real estate in California has been and will continue to be a solid investment. Since 1968, CAR reported, the long-term average price appreciation has been 9.1 percent.

So where does all this leave us as we look ahead to 2007? Crystal ball gazing is always a dangerous occupation, but I'd have to agree with industry economists who are forecasting a soft landing for the housing market statewide, perhaps 2-3 percent appreciation in Marin County. Continuing demand for housing, the strong job market and overall economy, as well as historically low interest rates should keep the market from any significant downturn.

If you own income property in Marin, perhaps it's a good time to take a look at the return on your investment and your net profits. You might consider the tax deferred 1031 Exchange for your income property from a condo to a duplex, commercial property or exchanging out of the county. There are still many potential buyers out there trying to lock in low mortgage rates and get the most home for their money.

Home sales (the number of homes sold) decreased by 5.6% for 2006 compared to 2005. Total dollar volume (the sum of all sales prices) was down 20.7% over the same period. The number of homes listed for sale during this time period decreased 22%.

BAREIS MLS information herein believed reliable but not guaranteed. Statistics from BAREIS, Inc. Multiple Listing Service. This data represents residential property. Copyright @ 2006 by Bay Area Real Estate Information Services, Inc. All rights reserved