Chart Guide: The below charts include a great deal of data. Besides the two charts immediately below title Marin Real Estate Pullbacks & Southern MarinPrice 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 year data will eventually meet with 2011 but it 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.

Marin Real Estate Pullbacks– shows the severity of the recent real estate downturn, in case anyone had any doubts. There have only been two years since county-wide average data started being compiled where Marin County-wide Real Estate prices decline year on year– after the S&L crisis in 91-92 where Marin County prices decreased a little over 1% each year. Against this back drop of generally stable upward sloping prices the Great Recession obliterated this trend with great volatility:

Mile High: Southern Marin County Price Index is a town-weighted-average by unit sales. Tiburon & Belvedere RESI prices (condo & SFR) 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).

The below 2 charts show Tiburon 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. Tiburon average SFR prices are off 18% and median prices are off about 10%. This is the worst year on record for Tiburon.

The TDG index is down 11% which is a closer to telling the full story than the 18% SFR average price drop and the 19.7% RESI (condo & SFR) drop. The drop is due to the lack of high end sales. There have only been 2 homes that have traded so far in 2011 above $4m. The average since 2007 is 9 homes above $4m. This trend will very likely reverse itself in 2012.

Interestingly– lot values have actually increased in 2011. The second chart below shows that the amount people are paying for the actual structure of the house has decreased about 4%. The takeaway from both charts is combined with the statistical price drop data above is that people are buying smaller homes in the bottom 2 quartiles of the market and planning to remodel.

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. It is a very good addition to market wide research however– and by this metric Tiburon CA Real Estate is only down 3% in 2011.

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

The homes that are selling in Tiburon fall into two divisions: 1) Below $1.3m and well priced—these homes are selling briskly; AND 2) Above $1.3m, remodeled, and well priced – the few tastefully remodeled, competitively priced homes that are on the market are also selling briskly at great prices (with a few exceptions).

The homes that are not selling are either over-priced, or need remodeling, or both. 17% of the homes on the MLS are in contract- this is indicative of a weak market, but not abysmally so (like Belvedere) given the season. Buyers continue to support average prices in Tiburon because of the lifestyle, school district, proximity to SF, family-friendly neighborhoods, and views– buyers are also shopping for ease of entrance (not projects) and/or great values.

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

Until now Tiburon has weathered the recession with little blood spilled. The reason has more to do with the holding capacity of Tiburon sellers– being wealthier and generally more successful, they can withstand downturns longer than people in other areas; but eventually homes get listed and sold at price levels that make sense given incomes in the area. My data shows that the average homes in Tiburon are trading at over 6 times average incomes when the normal range is closer to 4. We will have more accurate income data in 6 months or so when the Census data is published, but the point is that the paradigm for Tiburon home purchases was recreated during the bubble years and  needs to be redefined.

Tiburon Single Family Homes are in moderate correction mode -2% over the last 3 months versus the trailing 12 months as measured by $/sqft of sold homes. A more positive statistic is that Tiburon average prices are up almost 6% during this time. Either way, the data is at best mixed and is not good as it coincides with the Spring Rush after a very slow year.

Tiburon condos are actually doing MUCH better over the last 3 months +8%, but remember that was after 40% declines in 2009.

Tiburon homes in contract as shown below are a coincident indicator of activity in the market. As you can see measuring this blog to past Tiburon blogs, more homes are selling at lower prices. My guess is that the direction of the market over the coming months will be moderately negative as distressed situations that have been waiting for 18 months for resolution are finally coming to market, or are being repriced to more realistic levels.

The market for Tiburon homes has had a tough week. There following homes have either recently sold or are in contract:

1)      140 Lyford Drive, Tiburon wonderful lot – 5,023 sqft

• This house sold for $4.4m in 2005
• Closing Price Today = $3.370m
• sold for $670/sqft

2)      7 Hillcrest, Tiburon built in 2007 & well appointed – 4,950sqft

• Sold for $2.950m on 2/24/10
• Sold for $605sqft

3)      2311 Spanish Trail Rd

• Sold for $3.030m on 4/30/10
• $678/sqft

4)      70 Gilmartin Drive, built in 1990 – 5,560sqft

• Sold 3/27/10 for $3.275m
• $589$/sqft

5)      490 Ridge Rd. Tiburon, brand new house on a wonderful view lot with a pool $4,111sqft

• Contingent near $3.3m asking price

6)      616 Ridge Road,–went pending back in December – OLDer COMP

• Sold at $3.321m
• $683/sqft

7)      198 Stewart Drive – This sale is over 6 1/2 months old—the Tiburon market has declined substantially since then – OLD COMP

• Sold for $3.065m 11/5/09
• $785/sqft

4/30/10:  There has been an increase in activity in Tiburon homes over the last 30 days. The number of homes in contract has increased to 26% from 18%. This is positive as more homes are coming to the market and more homes are actually selling– which is what we look for of course. There does seem to be a growing number of stale listings, but these seem to be eventually selling once sellers drop their prices to more modest levels.

Tiburon has actually just overtaken Mill Valey as the town in Southern Marin with the greatest % of homes in contract– which is surprising as Tiburon prices have only partially corrected. Tiburon real estate is trading about -17% below 2009 levels and only -5% -7% below what my model shows as fair value for the area.

 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 Tiburon CA Real Estate can be found on www.TheDuPontGroup.net , our groups primary website.

When view the below Q1 data it is important to know that most of the data points below include all residential sales (SFR & Condos). I only separate these on my annual data reviews– you can see this in the SFR & CONDO data chart just below. Also please scroll down to the bottom for the 2009 year end data.

• Since 2005 on average 25% of all home sales in Tiburon are condo sales.
• In 2009 only 17% of  homes sales in Tiburon were condo sales (this actually skewed average Resi price data higher and had the effect of make average price drops less than in reality)
• In 2010 so far 28% of homes sales are condo sales giving the appearance of greater weakness in Tiburon real estate than in reality. I know this is confusing please call me with questions.

The takeaway here is that buying activity in Tiburon is currently relatively weak in relation to the rest of Marin county primarily due to the  fact the prices have not dropped nearly as much as other locations in Marin.

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”.

Tiburon Real Estate
Tiburon homes have had a mixed year. Statistically SFR home prices haven’t fallen much from their 2007 peak, about -11%. Average selling $/sqft have fallen more about -17%.  Homes continue to sell in Tiburon very close to fair value, which is surprising as this is not happening anywhere else in the county.  Most homes in most towns in Marin are trading at a 5-15% discount to what my model shows to be ”fair value”.

Why? There really isn’t much on the market with views in Tiburon that is turn-key and buyers are still paying up for views and updated homes.

Tiburon Current Inventory Graph 2/25/10

Tiburon Current Market Data: Inventory in Contract 2/25/10

While most towns in Marin are really seeing a surge in demand hitting the marketplace, Tiburon is only seeing a mild uptick. Prices are still relatively too high for many homes– sellers haven’t adjusted their prices fast enough and are going to end up getting even less for their homes as this recession intensifies later this summer, fall and into next year. An estimated 5 million additional foreclosures are likely to shock the banking system and may result in another leg down in this recession.

Condo prices in Tiburon are simply in a state of free fall and are bound to recover at some point. For more info about the shocking state of Tiburon condo prices please call Dave. 415-867-6611

Tiburon 8 Year Sales Data Change SFR & Condo

The current state of the market for single family homes in Tiburon shows the surge in demand that is hitting the market. This surge in buyer interest is greater than anything we’ve seen since summer of 2008; as a result I anticipate the next 8 weeks to be the best time to sell a home in Tiburon in 2010 AND since summer of 2008. If sellers wait too long to list their homes, the next round of foreclosures and a stock market sell off may scare all the buyers off again…

I remember quite well in 2007 everyone saying that this home or that home sold for $1000/sqft like it was normal…

Tiburon Quarterly $/SQFT by Q4

Q4 2008 and 2009 is off the pace of the preceeding three years. In analyzing the data for all Marin towns, it is primarily the high end of the market and particularly in Southern Marin where the greatest effect of the Bubble was felt.

Tiburon Quarterly Unit Sales

The below chart is not a cardiograph… it shows how seasonal our markets are… the best time to sell a house each year is during the spring months. In fact with data like this why would you ever sell a home at any other time of the year if you had a choice…?

Tiburon Quarterly $/SQFT Line Graph

Tiburon Quarterly Uit Sales Line Graph

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 folks 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 Marin 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.

Tiburon Annual Average SFR Price

I have plenty of data on Tiburon condos, but the only chart I am going to put in this blog / market update is the below chart. Tiburon condo prices are in free fall. The best real estate investments in Marin right now are condominiums. Call me and I will tell you why… Dave 415-867-6611.

Tiburon Annual Average Condo Price

The average home buyer in Tiburon needs almost $800,000 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.

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