Marin County, CA’s luxury real estate market segment continues to take shape in the aftermath of the equities meltdown of Fall 2008. In our New Economy, buyers are placing emphasis on prestige locations, sweeping views, grand appointments, compelling “estate history,” and impressive scale. The luxury market in Marin remains weighted towards homes priced under $4 million, although we did have 3 sales of homes priced over $4 million in July 2009. The number of sales in July 2009 is off by 74% from July 2008. The news is not all negative, however, as we had several significant properties trade last month and another 30 luxury homes are currently in escrow. For a detailed snapshot of current national trends from the Institute for Luxury Home Marketing dated August 2, 2009, click here. Note, if you would like a local report relating to any town or zip code in Marin or San Francisco, call me at (415) 350-9440. Buyers remain dubious of price stability (see chart below reflecting year over year median asking prices in Tiburon, Mill Valley, and Kentfield). But, increased conforming loan limits and a pronounced level of increased affordability across the board should help sales moving forward into the Fall as buyers with 25% down will obtain top-shelf financing for purchases of $1.6 million. While not necessarily “Luxury” territory here in Marin (although declining prices are putting some very nice homes into the sub-$2 million price bands), a sizable segment of buyers of luxury homes must sell their current homes first (80% of buyers are sellers). The chart below indicates that across the trend in Marin’s luxury segment is for lower prices — 10-25% lower than last year in Mill Valley, Belvedere, and Kentfield. The year over year inventory levels in Mill Valley have hovered at around 20% since May 2009 (much improved from a nearly 60% inventory increase in February 2009). Meanwhile, inventory in Kentfield has rocketed nearly 90% higher this year compared with last year. In combination, Tiburon and Belvedere inventory levels are about 70% higher than last year. Prediction: Kentfield and Tiburon / Belvedere prices will continue to recede through Q4 2009. Indeed, we can see that trend has set in dramatically in the above chart which tracks asking prices of homes currently for sale. [Click HERE for the rest of the report, courtesy of www.ImagineMarin.com)]
Marin real estate has, it appears, survived the worst of the downturn. While prices are down across the board no matter how you slice it, the road to recovery is in view. Yet, virtually every call I get from potential buyers, at some point in the conversation, eventually turns to short sales and foreclosures — distressed sales remain featured on many buyers’ dance cards. In fact, distressed sales are very competitive and often receive multiple offers. In Northern Marin (a.k.a Novato), 82% of homes priced under $500,000 are in escrow (that’s 40 out of 49 homes!). In San Rafael, 84% of homes priced at or below $600,000 are in escrow (that’s 32 out of 38!). These sales are propelled by value, the $8,000 tax credit, and the increased FHA loan limits which went into effect in April 2009. Early in the year, buyers were ALL talking about how they anticipated interest rates would go down to 3% (and some buyers were insisting that rates would go even lower). I would just nod my head and concede that was a possibility. After all, what do I know about the unknowable? But, I always pointed out that whatever rates fell to, you could never know the bottom until it was gone. And that rates would surely go back up again — I was not going out on a limb; every economist on Earth is saying the same thing (most believe this will occur by the end of Q1 2010). Sure enough, it seems buyers are picking up on this inevitability and they are out in droves. Inventory has dipped to 772 single family homes for sale (we had about 810 last month) in the Highway 101 corridor (this number excludes Western Marin inventory and condos). Open houses have been slower — as expected during Summer months. There is definitely a sense that with a little positive media and some further anecdotal evidence (and actual closings) that buyers are jumping because they believe the bottom is here or near, the market will surge with pent up demand. Certainly, well priced, updated homes in great locations are selling promptly. [Click HERE for the rest of the article, courtesy of www.NorthBayRE.com.] Standing back and looking at the higher price bands (especially in Southern Marin), things look a little different. Some sellers still suffer from pricing strategies that prevent them from realistically engaging with qualified buyers. These sellers are either: 1) NOT Sellers; or 2) are getting poor advice and direction from their agents. They will learn that "time on the market" is not their friend. Being a “smart seller” today means negotiating strong terms aimed towards a successful close of escrow within 30-45 days.
The chart below shows a 90-day rolling average of Mill Valley’s new listings and absorbed listings (e.g., sales), comparing current numbers with those of last year. Note that the while the numbers for new listings are about the same, the number of absorbed listings is about equal to 2008. If you would like to review a similar chart for any other town or city in Marin or San Francisco, please let me know.
The Tiburon and Belvedere real estate market is showing signs of gathered traction despite ongoing concerns on Wall Street regarding consumer confidence and spending. There are currently 102 active listings in the 94920 zip code, which covers Tiburon and Belvedere (down from 120 last month). Nineteen of these properties are priced over $5 million — however, three are currently in escrow and we did see a sale close for $7.5 million in July. This activity is up sharply from the flatline base experienced in the first half of 2009. Meanwhile, there is also fairly strong activity in the lowest price band (under $2 million), which accounted for 9 sales in July 2009. Overall, we saw 13 homes close escrow in July, as compared with 7 sales in April and May 2009, and 10 in June 2009.
One interesting observation based on the below graph: not until March of this year did the median asking price for homes in Belvedere dip below that of 2008. Belvedere was the last Marin city to experience that shift (a full 6 months after Tiburon). Over the past several months however, that shift has become more exaggerated as prices begin reflecting market realities. Indeed, there are currently 2 homes for sale in Tiburon under $1 million and another home in Belvedere. Rarely do we see Belvedere homes hit the market under $1 million.
There are currently 28 active properties listed for sale under $2 million in Tiburon and Belvedere — 10 additional homes are in escrow. For homes that sold in July 2009, the average price per square foot was $765 — although this number is skewed somewhat by the makeup of the sales last month, it is very low number that has caused sellers a high level of concern. Below is a chart with up to date figures relating to the number of homes on the market in Tiburon and Belvedere, along with the number of homes currently in escrow. Note in the chart below, beyond the entry level price band, activity was fairly slow this past month. Numerous additional ultra-luxury homes were removed from the market — typical for this time of year, but perhaps also influenced by the low price per square foot number noted above.
Price Range
Total Active Properties
In Escrow
up to $2 million
28
26%
$2 million to $3 million
28
18%
$3 million to $5 million
28
10%
$5 million to $10 million
11
21%
$10 million and up
7
0%
Tiburon and Belvedere real estate that sold last month exhibited the following characteristics:
If you have any other questions or would like a custom market analysis of your home’s current likely sales price, please call me at (415) 350-9440. My name is Kyle Frazier and I am a Certified Residential Specialist (CRS) and Broker Associate with Marin Counties finest real estate firm Morgan Lane Marin Real Estate. It is always my pleasure to be of service.
p.s. I know of several properties that are not being formally marketed on the MLS, so if you are looking to buy please call me to see if any of these may meet your needs. If you would like a copy of my Tiburon / Belvedere Hotlist, e-mail me at Kyle@ImagineMarin.com.
The Mill Valley, CA. real estate market remains predictably unpredictable — after just 17 sales in May 2009, we had a robust 29 sales in June 2009, followed by 22 sales in July 2009. As I noted in last month’s report, the decline in sales numbers this month was expected as families focus more on vacations and outside activities. And September will bring even fewer home sales, along with a moderate rise in inventory and increased buyer activity. Over the past quarter in much of Marin County, it has become apparent that asking prices have halted their downward spiral. As is evident in the graph below, which tracks the median price per square foot (down from $740 to $615), in Mid-June 2009 prices flattened out in Mill Valley. It will be interesting to see whether this flattening out carries over into the sales prices of homes trading this Fall and Winter.Based on last month’s sales total of 22, we currently have an overall inventory of homes sufficient to last about 5.45 months (up from 4.6 months in July 2009) — this is called the absorption rate. This is a HUGE reduction from the absorption rate from May 2009, which stood at well over 8 months. A big reason for the lower absorption rate is the reduced inventory as sellers removed thier homes from the market for the Summer — we currently have just 120 active listings.
While not discussed by most real estate agents, the absorption rate is an important barometer of market health. Below is a graph showing that in 2009, Mill Valley has consistently outperformed 2008 in terms of homes absorbed. Thus, while many agents seem despondent and unenthusiastic about the market, the truth is that things are much better than last year and continue improving. I predict that sales activity will increase significantly in the late Fall and into the Winter months, not only because of continued favorable interest rates, but also because I think there are many “real buyers” out there who have been waiting for “a sign” to buy — I don’t know what that sign will be (there are likely to be many “signs”), but it will come soon for “real buyers.”
The big news in San Rafael real estate this past month revolved around the sale of Carlos Santana’s 1.7 acre, 7,000 square foot estate, which sold for $4.185 million after a short two weeks on the market. Congratulations Carlos! Meanwhile, San Rafael listing prices experienced a brief rise earlier this Summer, but have again begun a downward shift over the past few weeks. By comparison, asking prices in Novato have been rising for several months, leading many to beleive that the bottom has formed in Novato. It does not appear this phenomenon is being replicated in San Rafael. [Click HERE for the rest of this article, courtesy of www.SanRafael101.com.]
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Marin County, Ca. sits just north of San Francisco and features some of the best cities in the Bay Area. Call on me with any of your real estate needs. It is my pleasure to be of service.
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