Stephen brought on a great new property this week. It’s a 3/2 Victorian home zoned for mixed use, plus a 2/1 apartment above the 3-car garage in back. The main house has period charm, including clawfoot tubs and beautiful wood details, and the location is amazing for those wanting to be near downtown. Open both Saturday and Sunday this weekend, 1-4. Asking price is $1,050,000.
It’s sounding like the government shutdown thing could mess with the housing market the longer it goes on. Here’s an article from the IJ, quoting a couple of the loan people we work with a lot. Let’s hope they get it together and get the government running again, and also avoid defaulting on the debt ceiling, which by all accounts would be a disaster. But in the meantime, a good idea to discuss potential delays with your mortgage person if you’re getting into contract on a home during all of this.
There’s been a lot of talk lately about the effect of rising interest rates on the market, including this article from SFGate. While it’s not hard to imagine that 6% mortgages and the corresponding reduction in affordability would have an impact on the demand for Marin’s high priced homes, that would still be a relatively decent rate by historical standards. And we’re far from that at this point anyway–just was quoted 4.375% for a jumbo 30 year fixed today from our in house Wells Fargo affiliate. Of course that assumes a 780 FICO, but that is still a very low rate. Going to be an interesting fall!
The numbers for July are in and there are no big surprises. Housing inventory in Marin remained very low–almost unchanged from June–and there are still lots of homes being sold. We have been feeling anecdotally that things have felt less crazy as we’ve gotten into July and August, and though it is still very common for there to be multiple offers on desirable properties, the number of offers in competitive situations seems in many cases to be smaller than at the height a few months ago.
Of course, with the real estate market being pretty dependably cyclical, we would expect things to slow down a bit this time of year, as people take vacations and are focused on other things, and then we see a little bump in activity in the fall with the slowest time coming over the holidays.
Much of the inventory that’s not selling quickly is in the higher price ranges, so supply and demand are still very out of line for entry and mid level homes. The picture looks more encouraging for buyers over the last couple of months when you look at all price levels combined as in the chart above, but less so when you take higher end listings out of the stats. Here it is for properties under $1.5 million. Notice how the total number of available listings (the light green bar) was much closer to the number of homes closing in July (the dark green bar).
If you have questions about what’s happening in the Marin market or would like stats tailored to your segment or area, please don’t hesitate to drop me a line at email@example.com.
We’re back to blogging after a hiatus due to technical difficulties, and thought we should look at the stats for Marin. When we last posted there had been an uptick in new listings–more in one month than we’d seen in a couple of years–and we were interested in seeing if that was just a seasonal thing or a sign of a trend that might help the low inventory problem. So far it looks like it was just a good April for new listings, as that did not continue for May and June (the blue line in the chart below).
Months supply of inventory was up just slightly in June to 1.6, which is still incredibly low.
It’s been a while since we’ve looked at the stats, as we like to do here at Blog by the Bay, and as insane as the Marin market has been this year there might be a small bit of positive data for those hoping to buy a home in Marin. Anecdotally I can attest to just how completely crazy things have been, but at least there are more new listings coming on than we’ve seen in some time. Inventory is still extremely low and those homes are getting snapped up quickly, but at least more sellers are starting to bring homes on, as you can see by the blue line in the chart below which shows the number of new listings each month in Marin County over the last three years. And the blue line is higher than the red line, which shows the number of homes going into escrow.
This is not to say things are heading back to a balanced market by any stretch, but this trend is what we would need to continue for some time to make that happen. This is the time of year we normally see an uptick in new listings, but last month we had more than we’ve seen in years, which can only be good news. Unfortunately for buyers nothing has changed so far, and it’s been the most competitive atmosphere in memory, with multiple offers not just probable but expected in most cases. Here’s a look at the months supply in Marin overall, which as you can see is still hanging around the one month mark, and it’s under one month in the lower price ranges.
Okay, this is one of the coolest homes I’ve seen in a while, and I’ve been meaning to get a post up about it. Kim Morgan at Frank Howard Allen brought on this amazing one-level house in Loch Lomond last week, and it’s the sort of unique place we just don’t see come on the market very often. It’s huge at 3807 square feet (per the tax records), has 4 bedrooms, and 8 bathrooms, counting the two in the pool house. When a lot of people think ofÂ Mid-Century Modern in Marin they think of all the tracts of Eichlers in Terra Linda and Lucas Valley, but this is custom Mid-Century of another level, in a great neighborhood of upscale homes.
Much of it is original, but seems to be in very good shape, and it’s on a big, flat lot with a pool. With the proper updating touches this home will be a Modern showcase. Think martinis, Mad Men, and pool parties. I believe they said they’ll be looking at offers on Wednesday, so as of this posting there may still be time to check it out.
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All-cash offers are pretty commonly the ones that win out in competitive situations these days, and buyers with loans often ask us why cash matters so much. They wonder why, if the seller is going to get their money at closing either way, would they consider the cash offer to be so much more appealing, and it’s a really valid question.
At the most basic level the reason is simple: sellers don’t like contingencies that mean they have to wait for weeks to see if the buyer might back out. If a buyer is cash, with no contingency for the loan and appraisal, then the seller knows the deal won’t fall apart due to financing issues no matter what the price is and how it relates to other recent sales. This means that in many cases cash buyers are setting the new comps.
Prices would not be going up as quickly if the winners in so many multiple offer situations weren’t cash buyers. Since they aren’t limited by an appraisal they are free to offer as high a price as they like. If someone were buying the home with an 80-20 loan and had limited funds for the down payment, they could only offer so much. And anyway, the seller would balk at an offer that was way over the recent comps as it might not appraise and the buyer could then back out. But the same high offer from a cash buyer is a sure thing since no bank or appraiser has to approve it. That’s the aspect of the equation a lot of people aren’t considering when they ask why cash and a loan aren’t the same.
This dynamic, with cash buyers being able to offer prices that are way above what the comps say the value is, means prices shoot up more quickly than if the market were ruled by people with 10 or 20% down. Homeowners who are watching this price appreciation and looking forward to bringing their homes on the market are certainly happy. But buyers who are trying to get into a home after saving up their 20% down payment are often feeling frustrated, losing out in multiple offer situations and seeing prices shoot up at the same time.
It can be tough to compete with aggressive, all-cash buyers but there are some strategies that can make an offer with financing more competitive. We are always happy to help buyers figure out the best strategy for their situation, so drop us a line if we can help!
Here’s a quick look at the stat I was taking about recently. The absorption rate, or the percentage of active listings going into escrow in a given month, was up to 75.3% for February for Marin County overall. That’s higher than it was in any month even back in 2005, at the height of that crazy market. More listings have been coming on the last couple of weeks, so we’ll see if it does mellow out a bit as we head into spring.
Itâ€™s that time of year again when you need to start planning for your kids’ summer activities. Either of these resources can help you make a decision that’s right for your child.
Check out Marin Magazine’s Summer Camps Guide which has listings for a wide variety of day and overnight camps, or you might want to stop by the Marin Camp Fair being held at Dominican University this Saturday, March 9 from 11:00 am to 2:00 pm. More than one hundred day and overnight camps for kids from Preschool to High School will be sharing information about their programs. There will also be a bounce house, professional hula hooper, free pizza and door prizes for the first 250 families.
Location: Dominican University of California Campus, Conlan Gymnasium, 1475 Grand Ave, San Rafael.