Belvedere homes and home prices are similar to Tiburon (or vice versa). Troubled Belvedere homeowners as well as sellers that simply want to move for ANY reason, have been holding out for 20 months now. But they can’t hold out forever; and we are now finally seeing homes trade at more reasonable prices.

Like every town in the county, loans were taken for a variety of reasons (remodel, vacation, new cars etc) leveraging real estate like it was a Treasury Bond with a guaranteed return. The middle chapters of this story are now complete: these real estate return assumptions were faulty, but the money was already spent (growing our economy at an unsustainable GDP rate). And now after years and years of living in Belvedere, as well as months (or years) spent on remodel with very high input costs (wages & materials), these homes that are finally coming to the market are priced to “get their investment out”. Homes priced this way rarely sell in a declining market where other comparable homes nearby are “priced to sell”.

There are $200,000,000 worth of homes for sale on and off the MLS in Belvedere alone. The longer these homes site on the market, the lower they will sell for. The average list price of a home in Belvedere is $5,000,000.

We have entered a period of much slower growth due primarily to 2 things: the demographic reality of the baby boomer generation on the down slope of its generational spending cycle, and second—a glut of debt on every level: consumer, municipality, state, region and nation.

Homes sold for very high prices in 2005-2007 during the peak spending years of the baby boomers and the peaking lending years by banks. There may be a few homes purchased by buyers at prices where money is less important than finding the perfect house; but most of these homes will likely sell at lower prices. The longer sellers wait to drop their prices the less they will get for their homes.

4/22/10:  The trend is slightly improving here in Belvedere. There are 2 more homes on the market than there was 30 days ago AND 2% more of the homes on the market are incontract.

There are two schools of thought regarding which end of the real estate market leads the area out of weakness. On the one hand– the ultra high end of the market is represented by the ultra successful which have proven their hand in the market place. Some people believe that this market segment leads the area of weakness.

I however, believe that generally the lower end of the market leads the area– that liquidity in the lower end enables home owners to trade up as their incomes and families increase; that this demand trickles its way upmarket until it reaches the higher end. This is what is happening now– as the liquidity in the lower market segments over the last 4+ months is just now reaching upmarket.

To a certain extent both are true depending on the economic circustances (job market) and what is happening with the stock & capital markets.

This site works in conjuctuion with www.thedupontgroup.net our primary website and if you have any questions please do not hesitate to call me 415-867-6611.

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.

Please start by reading the Marin Update:  at right click “Marin Update”.

Additional information regarding Belvedere CA Real Estate can be found on www.TheDuPontGroup.net , our groups primary website.

Marin County Update
In the last 44 years, there have been only two years (excluding 2008 & 2009) when average home prices in Marin County have decreased from one year to the next: -1.2% in 1991 and -1.4% in 1992– after the S&L crisis.

Marin County average residential home prices fell -12.7% in 2008 and -21% in 2009.  

 A unit-sale weighted average of Southern, Central & Northern Marin show Southern Marin prices are down -17.4%, Central Marin down -13.1%, and Northern Marin down -18.4% from 2008 levels.

For much more more information from a mile high perspective please see right nav bar, click & read “Marin Update”.

Belvedere Real Estate
Belvedere current market conditions mimic the larger trend in Marin County– the lower part of the market is very active and the high end is really slow.

Statistically Belvedere home prices, like Tiburon home prices, have shown remarkable resilience so far. However– there are a number of homes in Belvedere on the market that have been sitting for over a year at what I consider to be very attractive prices and still haven’t sold. Several homes come immediately to mind. The truth is that the wealthier a town is the longer home owners can hold out during periods of dropping prices. But they can’t hold out forever. There are about 10 homes currently on the market in Belvedere at pretty much ludicrous prices. Sellers in Belvedere who are reading this blog are encouraged to read the Marin Update blog and to Google “T2 Housing Report” or call me and I will email the report to you. If you need or want to sell your house in the next 5 years I would suggest being very aggressive with pricing now to capture the demand that is clearly present.

The low end of Belvedere real estate is very strong right now with all the homes in the bottom quartile that are on the market currently in contract. The middle market and upper end is still very slow.  Also– notice that over 50% of the homes on the market are clustered in the top pricing quartile– while this part of the market has been quite slow for a while and inventory has backed up in this market segment– it is also historically a characteristic of mispricing relative to exisitng demand:

There are a few homes that have sold at remarkably low prices in 2010, but most of the homes that were for sale and didn’t sell are either off the market temporarily are in the process of refinance.

Several brokers who have been in the business for a while anticipate that 2010 we will see more foreclosures in Marin than we did in 2009; wealthier people can simply hold out longer.

4th Quarter comparisons

Notice the rates of return above and below when you add the effects of leverage (mortgage). Why would you invest your money in anything else? During the early Bubble years I worked at Merrill Lynch as CFP/Financial planner/advisor and everyone i spoke with in the Bay Area was investing in real estate. Young professionals were taking $50,000 bonus’ and leveraging up into $2mm investment properties. I tried to tell everyone we were approaching the end of the cycle and that prices were bound to correct. Unfortunately– there was no data to draw from that showed that real estate prices could actually go down… so everybody assumed it was a risk free investment; and by comparison stocks, bonds and mutual funds looked relatively boring with low returns.

The average home buyer in Belvedere needs almost $1,000,000 cash in the bank to afford a downpayment on an average home with a 70% mortgage, while also retaining a rainy day fund of cash left over in the bank should anything go wrong.

The town of Belvedere has about 890 homes and just over 2,000 residents and surprisingly few kids.

In 2008 and 2009, Dave and the DuPont Group are leading agents in Marin County Real Estate. Since the recession began in earnest in 2008, Dave personally closed over 36 sales and $47m in real estate sales, and his group has closed over $60m. For 2 years running Dave has sold more homes than any other agent at DB Sotheby’s Intl Realty. The data in these pages represents the extra mile we go for clients and is our competitive advantage over other agents in all parts of Marin. Now is not the time to select an agent to represent you because they are a friend or even because they may have represented you in the past. The work habits most realtors has evolved over the past 20 years are not translating well into selling homes in today’s real estate environment where home buyers make decisions because of financial considerations as opposed to emotional ones.

Dave is a Certified Financial Planner (CFP), Certified Financial Manager (CFM), received his MBA from Pepperdine University, a CA real estate broker and worked for approximately 10 years in the San Francisco financial district. This Blog works in conjunction with The DuPont Groups primary web site.

Please call me to discuss this information in more detail 415-867-6611 – Dave