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Leaves are starting to hit the ground as the days grow shorter. But, Novato’s hot market shows no signs of cooling down. In October 2009, 50 Novato, California homes sold, compared with 35 sales in September 2009. Suffice it to say, the Novato real estate market is hot. Entry level home sales have shown sustained strength for the past 6 months. The number of homes actively listed in Novato remains very low compared with the rest of Marin (and the percentage of homes in escrow remains much higher than the rest of Marin). This exceptional demand is based on stunning affordability (homes are selling now for prices nobody could have dreamed of 3 short years ago) and the fantastically low interest rates.
While the average sales price of Novato homes rose in August to a remarkable $713,440 (based in large part on the makeup of sales), that number fell back to Earth in September — $646,389. Last month, the average sales price rose to $667,788.
Certain zip codes are performing exceptionally well. For example, in 94949 (Southern Novato) the percentage of homes in escrow is up 38% from last October and the average days on market is down 70%. This is simple supply and demand. Savvy buyers waiting for “the bottom to hit” recognize that we may be there and that any further price erosion will be outweighed by increased interest rates which are likely around the bend. Surely, home buyers in Novato are finding that it is increasingly difficult to identify “turnkey” homes under $550,000. In the 94949 zip code, median prices year over year dipped a mere 3%. I think many casual observers would be surprised. Local agents are all talking about a “bounce” in prices over the past several months.
Below are the percentages of homes in escrow in each of Novato’s major price bands:
- 78% of homes priced under $500,000 (up from 73% last month);
- 60% of homes between $501,000 and $600,000 (down from 66% last month — we have 5 new listings that just came on the market or this number would be higher);
- 45% of homes between $601,000 and $750,000 (down from 53%);
- 31% of homes between $751,000 and $1 million (about the same as last month);
- 23% of homes between $1 million and $1.5 million (down from 31%);
- 0% of homes between $1.5 million and up.
Importantly, and in line with recent months, the move-up price bands are selling as well as the entry level properties:
- 26 homes priced under $600,000 sold in October 2009
- 16 homes priced from $601,00 to $1 million sold in October 2009
- 5 homes priced from $1 million to $1.5 million sold in October 2009
In fact, more homes sold in October 2009 in the $1 million to $1.5 million price band in Novato than sold in Mill Valley in that same price band. I have regularly noted that the Novato luxury market is likely to gain momentum and we are seeing tangible sales figures support my observations.
