Marin Market Update-January 2017

While last month’s update wasn’t an overall review of 2016, it did have some salient points that still apply in January 2017 as we recap the year. 

  • Low inventory (currently at 1.24 month’s supply of inventory)
  • Higher prices (median sale price up 8% to $1,195,000)
  • Pent-up buyer demand, but those buyers are making smarter choices
  • Election confusion (now post-election confusion)
  • Economic ups and downs
  • Interest rates began to rise (currently holding steady at 4.25%)

So, what did we take away from all of this and how will that dictate the market moving forward?

We believe this is a good time for sellers to finally consider putting their homes on the market. Interest rates will, no doubt, continue to rise, and when they do, prices will stabilize and inventory will rise (a less opportune time to sell). We still have a lot of pent up buyer demand that is ready and waiting for the perfect Marin home.

Marin will always be a desirable buy and chances are, based on historical data, your purchase will appreciate over time. It’s the peaks and valleys that are most worrisome, but quite frankly, our peaks are never as high and the valleys never as low as the rest of the market, namely San Francisco. We are a “steady Eddie” county as far as pricing goes.

hile timing is important and nobody wants to buy high and sell low, you can be assured that if you plan to stay in your home for five years or longer, the chances of building some nice equity are extremely high.

So, here are some reasons we believe it would be prudent to list your home this winter:

  • Pent-Up Demand: Buyers are clamoring for properties — paying all cash, or eliminating pesky contingencies. They want your house, or at least a house. Because so many buyers missed out on the opportunity to buy in 2016, experts are expecting a surge of buyer activity this January. If your home hits the market early this year, it will likely face less competition while giving fourth-quarter-of- 2016 buyers a second chance.
  • Low Inventory: There just aren’t enough houses on the market! According to NAR, there’s less than 5 months of available inventory (1.24 months here in Marin). In a healthy housing market, there would ideally be six months of inventory. The inventory in San Francisco and most of the Bay Area is half as robust, meaning there is twice as much demand. Conclusion — we remain in a seller’s market.
  • High Prices: Home prices are rising faster than inflation. In fact, there are 35 housing markets that have reached new median home price peaks (RealtyTrac).
  • Higher Interest Rates: By a unanimous vote on December 14th, the Fed raised its federal-funds range by a quarter-percentage point to 0.50%-0.75%, its second rate increase in a decade (Market Watch). If you list your house in early January, it’s possible you’re giving a buyer an indirect discount — if that buyer locked their rate before the Fed’s hike. Knowing that their lock will expire, your buyer would probably be willing to do anything to close quickly to keep that mortgage payment exactly where they want it.
  • High Equity: The California housing market is blazing hot; San Francisco home owners who sold in October 2016 raked in a 75% profit, according to RealtyTrac. For comparison, nationally, sellers made a 17% profit on average when selling their home in the third quarter of the year.

Single Family Homes Sold in 2016 vs 2015

ecember saw a slight increase in median sale price, increasing from $1,105,000 to $1,195,000, an 8% change. 1,953 homes were sold in Marin in 2016, the majority of which were in Novato, Mill Valley, and San Rafael. The most significant increase in number of homes sold was in Ross, which saw an additional five homes sold last year. Although 2016 was a slower year, we saw a positive price change in Corte Madera, Fairfax, Larkspur, Novato, San Anselmo, San Rafael, and Stinson Beach.

The most expensive home sold in Marin in 2016 was 1860 Mountain View Drive in Tiburon, which sold for $13,000,000 after 12 days on the market, down from its original list price of $13,500,000

Trends of Homes Sold in Marin in 2016

ost interesting to note from the chart above the difference in the number of homes sold in the below $1 million range between 2015 and 2016. In 2015, 983 properties were sold under one million, whereas in 2016, 747 sold. With a relatively similar number of days on market, one might ask, why? Consider the inventory — we have seen far fewer homes under that one million price tag come on market. The luxury market in the $5+ range remained relatively the same with 38 homes sold in 2016 and 44 sold in 2015, but there was a marked difference in the $3-5 million range with 33 fewer properties or -26% selling this past year.

Marin Real Estate Facts: 

  • Lowest Priced SFH was 296 Redwood Drive in Woodacre for $345,000.
  • Number of homes sold in Marin in 2016: 1,953
  • Median home sale price in Marin in 2016: $1,195,000
  • Median price of condos sold in Marin in 2016: $592,500
  • City with the hottest growth: Larkspur, with 19% growth, and Stinson Beach with 25% growth
  • There were 38 sales over $5,000,000 in Marin in 2016

Price and Volume of Condominiums Sold in Marin in 2016

The condominium market in Marin has been relatively prosperous this year. Its peak occurred in June, with a total of 62 units sold for an overall median sale price of $652,500. This was also the highest median sales price of the year. 2016 ended on a good note for the condominium market, with 44 units sold in the last month of the year and clocking in a median sales price of $607,500. This is a 4% increase from December of 2015.

Overall, we think 2016 was a great year for real estate and have no reason to believe this next year will not be the same. Yes, we will have to watch some areas of the economy and how that affects housing purchases, interest rates as it relates to prices, and all external forces that may encourage movement in the market -- sellers deciding to move and inventory opening up everywhere; this is not a phenomenon specific to Marin. We hear the same stories from our Leverage Global Partners around the world..."if we just had properties to sell!"

Here at mid-month we are just starting to see the market pick back up again with properties coming on the market. Will the rain stall some purchases? Probably. But some serious buyers know that the time to strike is when others are taking a break! If you have any further questions about the local market, or wondering what your house would go for today, please feel free to contact The Costa Group. We would be happy to meet with you to discuss your Marin County real estate goals for 2017.