Marin County Real Estate Q1 Update

April 2, 2010

Filed under: 1. Marin Update — dwdupont @ 6:13 pm

The Spring 2010 market is off to a roaring start. The momentum started late in 2009 in the lower market segments (bottom 2 price quartiles of each town) and has continued in those market segments. The health of any real estate market originates in the lower market segments and slowly ripples up the price spectrum until at the end of the cycle the top of the market peaks when the lower end has already started contracting—as happened in the last cycle. While average, median & $/SQFT price trends are marginally improving, unit sales are seeing a greater bounce.

At one point at the end of 2009 over 50% of the homes in Marin listed under $1mm were ‘in contract’. Any number over 25% represents a strong, healthy real estate market.  

Currently, 34% of all homes for sale in Marin are in contract—this is quite simply FANTASTIC!!! Thousands of Marin home sellers who were (financially) stressed and/or needed to sell their homes for a myriad of reasons have either done so or are doing so.

  • 32% of all homes for sale are ‘in contract’
  • 39% of homes listed under $1mm are in ‘contract’.
  • 20% of homes listed between $1mm-$2mm are in contract
  • 15% of homes over $2mm are in contract
  • 8.5% of homes over $3mm are in contract.

 

Currently the data shows that 32% of the homes for sale in Marin are in contract. However—there is no easy way to compute the number of homes that are in contract which are short sales. These short sales are definitely skewing this number, as the escrows go on and on and one for quite often a year or more; we just don’t know how much they are skewing this current data. My guess is that 10% of the homes in contract (~45) are short sales which means the real number of homes that are in contract is 414—which would translate into 28% of homes that are currently listed for sales are in contract and are not short sales.

Rumors continue to abound of “massive inventory” coming to the market. We have heard this continuously for almost a year– and now I, and DuPont Group buyers, am dubious. Southern Marin higher-end inventory, particularly Tiburon, is still tight, over-priced and not really moving in the upper markets; most homes that are accurately priced, sells quickly. Sellers of higher end properties should pay special attention to the paragraph below regarding risks to the downside…

In 2008 and early 2009 it was originally my belief that that Winter 2010 would be the bottom of the market in many parts of Marin. Towards the end of 2009, and early 2010 it seemed to me that the deleveraging process hadn’t completely run its course, that the political response was deferring the bottom of the recession; that the second tranche of foreclosures (5-7 million) coming in 2010 and 2011 would spook investors– and that the bottom of the real estate market would be a function of a sell off in the stock market. Obviously this hasn’t happened yet and while home buyers should be cognizant of risks to the downside (Ex. Japan deflation), I am becoming slightly more comfortable with the more positive economic assessments of icons Warren Buffett and Bill Gross who anticipate headwinds to growth, and a slower growth environment generally moving forward, with greater regulation—but that the financial crisis and more generally The Great Recession are pretty much over.

Beware Risks Remain!  The current recession was a function of 30 years of increasing reliance on debt to finance many aspects of personal consumption and municipal, state, and national budgets. This primary problem persists. The private deleveraging process takes years to complete; and has barely started. In the public domain, as Bill Gross discusses in his latest ‘Rocking Horse’ piece, unfunded future entitlements have actually increased dramatically since the beginning of the recession with ongoing war expenses, the stimulus packages, the passing of the health care legislation, and decreasing tax revenues.

Marin County occupies a unique niche. Many of the higher-level VPs & executives that staff the peripheral jobs which support the technology industry (legal, marketing, recruiting, finance etc) live in Marin and commute to SF. While the technology industry generally lags the broader economic cycle, that sector’s prospects relative to the economy as a whole are good; which means our relative economic prospects are good; which translates into the long term real estate prospects are good relative to the broader county. Prices are still very high in some areas, and much lower in other areas. Buyers should be choosy, purchase conservatively and keep at least 1 year of living expenses in the bank.

Last, in the ensuing pages you will find detailed statistical information about Marin County Real Estate, its 13 primary towns as well as Stinson Beach data.  The data you will find in these pages represents the tip of the ice berg and is also our competitive advantage in the marketplace—Our research  is the reason we outperformed virtually all other agents in Marin real estate last year, and why our clients save money by working with us. For more detailed information regarding the application of this data in actual real estate transactions—please call me at 415-867-6611       415-867-6611     or email me at Dave@TheDuPontGroup.net to set up a time to talk.

See Marin County data below:

 

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