Mill Valley Real Estate Update

December 9, 2011

Filed under: Mill Valley — dwdupont @ 12:55 pm

Chart Guide: The below charts include a great deal of data. Besides the chart immediately below title Southern Marin Price Index, all charts show annual data, business cycle average and trailing 12 month stats. The business cycle average can be considered a  “Intrinsic Value” estimate. The years where the county or town was trading above the business cycle average relates to market conditions dominated by optimism/exuberance and the years where it trades under this business cycle average is more dominated by fear/pessimism/uncertainty & restraint. The trailing 12 month data column will eventually meet with the 2011 data column and is a barometer of which direction the market is heading. If the trailing 12 month number is higher than the 2011 number, it means market conditions were generally better at the end of 2010 then they are today.

Mile High: Southern Marin County Price Index is a town-weighted-average by unit sales. Tiburon & Belvedere are having very difficult years (both off -20%) as the high end of the market is still very slow and is dragging this SOMA index to the lowest point in the trailing business cycle (about 7 years). Mill Valley Real Estate prices are only down about 6.6% in 2011.

The below 2 charts show Mill Valley CA homes prices. the first is median price and the second is TDG Price index which is a mixture of average prices, median prices and is a function of the size of the house.

Both charts are telling the same story. Prices are near lows for the business cycle, but trailing 12 is lower than 2011 which means the market is moving in the right direction– aka: the market this time last year was weaker than it is now.

Unit sales is positive. More homes have traded this year than during any of the last 4 years. This is a good sign and a possible indication of improving market conditions and marginally higher prices next year. If the EU can delay imploding for another 6 months or a year (its inevitable), Spring 2012 will be a good one for Marin County home sales.

SMREB & TheDuPontGroup.net is the only place I have found anywhere online that has compiled lot values for the markets in which we operate. The below chart shows average lot values for Mill Valley. This should be compared with the chart underneath it which shows the value of just the structure of homes in Mill Valley without considering the lot/location value. By examining these two charts together we can see that the distress in the market in the form of short sales and REOs is pulling down structure values more than lot values– and that the trend is favoring lot value over structure value. However, this can be interpreted a number of different ways. Please call for more info.

The most misunderstood market statistic is the below chart selling: $/sqft. Buyers should never try to compare homes by this barometer especially in locations where architecture and lot/locations vary greatly as they do in Marin County. The greatest repository of home value is lot/location which is not explained well at all by selling $/sqft. That said it is a great statistic to compare market-wide health and direction. As you see below, homes are trading a news lows for the business cycle by selling $/sqft.

Earning Your Business

The purpose of this Southern Marin Real Estate Blog is to offer greater insight into our local real estate markets than you can find anywhere else– to help you make better decisions for yourselves and your family. The research found in these pages is my competitive advantage in this market. I have yet to find a rational buyer who doesn’t respond to this data; remember most buyers emotionally want to buy a house– they just don’t understand the value proposition. You deserve a agent to represent you on either side of the transaction that has done  their homework.  If you are thinking about listing or buying a home all I ask is that you include me in your interviewing process.

Thank you & Happy Holidays!

Dave DuPont MBA, CFP

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