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

Mill Valley has four market segments: the entry level, middle market, higher end and the ultra high end; ultra high end buyers in MV are almost non-existent now. The entry level of the market ($1.25m and below), like most areas in Marin, is brisk. Well priced homes are selling quickly. Both the middle market ($1.25-$1.85) and the high end ($1.85m+) are similar: very slow! There are 40 or so home on the market in both segments, and approx. 7% in contract in each segment. SLOW! There’ve been 37 sales year to date in the middle market and 30 in the high end. All else being equal the middle market is having the worst relative year in Mill Valley. The graph below and sales on the facing page tell the story. 

Average Mill Valley selling $/sqft is $550 and $661 for the top half of the market.

Please reference our main website www.thedupontgroup.net or call Dave 415-867-6611 for more information.

Mill Valley Real Estate has had a decent 6 months. Activity in the lower market segments really increased, many homes were sold, and families were able to move on with their lives. Like other areas in the area, state & nation many homes were purchased based on assumptions which turned out to be incorrect, and on a financial paradigms that proved faulty:

Example of mistaken assumptions & a broken Paradigm:

• A lot was purchased with a tear down on it for $995,000 up near the Edgewood area of Mill Valley.
• At the time everyone said it was a “fantastic deal.”
• A new 3,250sqft house was built that cost $435/sqft to build during peak market conditions.
• Additionally the owners spent about $200,000 on hardscape, landscaping and architecture and are into the house for about $2.6m.
• While it is a beautiful house with a wonderful floor plan for a family, it is of average finish and quality due simply to the cost of materials at the height of the bubble.
• The family had two incomes, but the husband was transferred back east by his company. He said no, left the company, and started looking for work… but it was slow going.
• They put the house on the market at $2.7m so after commissions they would be “almost whole” not including any compensation for the endless hours, & marriage and family stress of selecting and designing items.
• They are now getting offers in the mid $2.2m range.
• The house will eventually sell near that $2.2 number and after commissions will result in a $400-$500,000 loss…. not to mention all the time and energy wasted with architects, designers and selecting door knobs.

Last year saw a tremendous number of situations very similar to above. Mill Valley average home prices tanked just over -20%. Most of the sales that drove down average prices were in the bottom 2 quartiles of price in Mill Valley– the upper market homes mostly sat and got dusty.

Activity in the upper market however has continued to be sporadic but now there are at least homes selling—the ones priced to sell. All the other homes are priced to “get my money out” — these homes aren’t selling in this market. Sellers are advised to wait 3-5 years to sell higher priced homes as you will have a difficult time getting your money out in this market.

The assumption that someone will eventually come along and buy it doesn’t work in a declining market the way it works in an rising market. In a rising market, the longer you wait the better your chances are regardless of how many days on market. In a declining market the longer you wait for Mr & Mrs. Right, the lower your eventual sales price will be.

While recent data for Mill Valley SFR homes is improving– +8% for the year relative to the last 12 months, this is the kind of bounce you would expect this time of year anyway and so at best we are mildly improving. The likely path moving forward depends on the direction of the stock market as it will lead the employment markets and housing in all price ranges.

One way to hedge price decreases in your home: go short the S&P 500 (this should not be considered as investment advice or financial planning advice). Please speak with your investment advisor and if you don’t have one, please try to find one.

“Jake Schutt at Parallel Advisors (www.paralleladvisors.com) says that first: you should have a financial plan in place and know how you are tracking against your goals. This also puts portfolio gains and losses in meaningful context. Second, a diversified portfolio with the proper allocation will protect you against downturns.”

Recent market data of homes in contract in Mill Valley:

Mill Valley condo prices are seeing a 2% bounce relative to the last preceeding 12 months.

4/30/10:   The data has worsened slightly in the last month in Mill Valley CA Real Estate. 25% of the current homes for sale are in contract versus 26% 30 +- days ago. On the surface, this represents a balanced market. However, if you remove short sales and homes that are in contract on a contingent  basis, my guess is that the actual number of home in active contracts is just under 20%– which is still better than it was most of last year, but still fairly weak.

Mill valley is off about 22% from peak 2007 prices– the second most in Southern Marin behind Sausalito which is down 30%+ from peak 2007 prices. This has created greater liquidity and facilitated the many home sales that have taken place particulkarly in bottom 2 quartiles of the market over the last 4-5 months.

The general feeling on the street is that things are fairly slow– best in Southern Marin, but still slow. The only buyers with any urgency to buy right now are families with kids.

 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 Mill Valley CA Real Estate can we found on www.TheDuPontGroup.net , our groups primary website.

Marin Real Estate
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”.

Mill Valley Real Estate
For several months now the low end of Mill Valley Homes: or those under $1.25m have been really active. The same goes for almost every town in Marin except Sausalito– and the reason is that the buyers in the marketplace with the most urgency to buy right now are mainly families moving either out of San Francisco or relocating here and wanting a decent public school system within close proximity to the San Francisco job market.

The big change in the marketplace in Mill Valley is the middle market and high end are all of a sudden very active– showing 33% of the homes on the market in contract. There is clearly a surge in demand hitting the marketplace and lets all hope it continues thru the summer. Sellers are advised to rush their properties to the market to benefit from this surge in demand– I do not forsee it continuing through the summer.

Mill Valley Real Estate Inventory Graph 2/25/10

Mill Valley Real Estate Inventory Bar Graph 2/25/10

Please see the below information and call Dave DuPont for further insight 415-867-6611.

Mill Valley Average Price By Q4

Unit Sales are seeing a rebound when compared to the last two 4th quaters. But if you look at several graphs below of unit sales by year we see that the improvement in the 4th quarter of 2009 was really just pent-up demand that brought us back in line with 2008 unit sales and far off the pace of 2007.

Mill Valley Quarterly Q4 Unit Sales

The below graph is very telling. Selling $/sqft are 19% off 2008 levels and 23.5% off 2007 levels.

Mill Valley Quarterly Q4 $/SQFT Data

Mill Valley Quarterly Q4 $/SQFT Line Graph

In the shape of a bubble…

Mill Valley Quarterly Q4 Average Prices

Mill Valley is a seasonal market…

Mill Valley Quarterly Q4 Unit Sales

One way to look at it is that Mill Valley is back to 2003-2004 level prices. However– I hear this frequently in the marketplace but it doesn’t really mean anything– we could be going back to 1997 prices. The truth is that people who purchase homes in Marin anywhere near these levels will be just fine– its all about finding the righ home at a decent priceand having a 3-5 time horizon.

Mill Valley Annual Average Prices

Median prices are down less than average home prices– which means the spread between them is narrowing which means the lower segments of the market are more active than the higher segments.

Mill Valley Annual Median Prices

Mill Valley Annual SFR Unit Sales

Mill Valley 8 Year Sales Data Annual Change

Long term home price appreciation is driven by incomes and jobs first and foremost, and interest rates secondarily.

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