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 of 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.
Questions or thoughts feel free to drop me an email at email@example.com.
Loaded with period detailing throughout,this CHIC MID CENTURY MODERN 3800 sq ft home comes complete w/3 fireplaces,2 family rms,an updated kit,elegant formal Living & Din rms all situated on over 1/3 of a level acre. This custom designed single level house is truly one of a kind w/high open beam ceilings,custom cabinetry & floor to ceiling windows.The backyard offers an outdoor patio,BBQ,sundrenched pool & his/hers changing cabanas & showers.
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.
It’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.
We’ve been posting for a while now about how hot the Marin housing has market has become, and how we need more sellers to bring homes on to satisfy the incredible demand. All of last year we saw low inventory and lots of buyers competing for those few homes for sale. Well, it’s gotten even crazier so far this year. We haven’t seen anything like this since 2005, and even then I’m not sure it felt quite like this. The whole county is experiencing the effects of the high demand and low inventory, but in especially popular areas like Corte Madera and Greenbrae it’s getting kind of ridiculous.
In Greenbrae for example, as of this writing there are zero active listings for sale. None! There are five properties in escrow, and a few have closed so far this year, but if you’re shopping for a home there right now you’re probably frustrated, and with good reason. Corte Madera has had a little more inventory, but with exceptions here and there everything is selling right away, with up to twenty offers in some cases. And looking a little farther north, just this week we’ve seen homes in San Rafael and Novato receive nine offers each.
Here’s a look at the absorption rate for all residential properties in Marin County, which is a good measure of how hot the market is. It’s measured as the percentage of the active listings that go into escrow per month, and it was up to a whopping 68.6% in January. That’s compared to 36.7% one year ago, and 15.2% back in January 2010.
This means that by definition prices are actually going up rather quickly, as each home that closes substantially over the asking price becomes a new comp for the next listing. It can’t go on forever, and a surge of new inventory this Spring will hopefully even things out a little, but for the moment we are in one of the hottest, most competitive markets Marin County has ever seen. It’s certainly great for sellers, but overall a little more balance would be nice.
For one of the the best brunch restaurants in all of Marin head out to the Two Bird Cafe in San Geronimo. What a great way to wake up on the weekend. The food is amazing and the service is top notch. We got up and went to breakfast there last Saturday with the kids and were blown away buy the yummy french toast and the best pancakes we have ever had. The ambiance is rustic and relaxing. We headed out to Point Reyes after that and spent half the day in West Marin. A great way to relax and start the weekend.
The Marin County Sheriff’s Office of Emergency Service is launching a new notification system tomorrow, on Alert Marin Day, Jan. 26th. It’s an upgrade to the Telephone Emergency Notification System (TENS), that calls you when there’s an emergency. Now you can register your cell phone or VOIP number to receive emergency alerts by text, voice and email. You may register multiple geographic locations for notification, such as home, work, children’s school, or a parent’s home.
Go to www.alertmarin.org for info and registration. It just takes a couple of minutes, and it could save your life or property!
Looking back at 2012 the big story the whole year was the incredibly low inventory level. It started low in January and never really ticked up much, and more buyers kept jumping in the market, sensing they had missed the bottom and had better buy a home before they missed the boat. The problem has been there just haven’t been enough houses for all of these buyers to buy. This has meant that correctly priced, desirable homes coming on the market have been getting tons of attention, and multiple offers have become common–almost a given in many cases. It’s been a great market for sellers and unless something changes dramatically it’s going to continue to be as we head into 2013. Here’s a look at all residential properties in Marin under $1.5 million (the most active segment of the market) over the last five years.
The light green bars that get lower and lower show the number of homes for sale each month, the dark ones indicate the number of homes closing each month, and that blue line that dips down to the floor at the end…that’s the number of new listings coming on the market. What does that say? We need more homes for sale!
And below is a look at the months supply of Marin County homes under $1.5 million, based on how quickly they’re going into escrow. It was down to 1.2 months in December! How bad is it? I just checked and there are only four active listings in Corte Madera right now–three single family homes. Three. This is not normal. There are only seven listings active in Fairfax right now. This is very unusual.
Now Real Estate 101 says you should bring a home to market in the spring when the weather is nice, the flowers are blooming, and a young man’s fancy turns lightly to thoughts of love, etc. And there are reasons for that of course. But if everyone else is thinking the same way then a bunch of homes will come on about the same time, so we get the big spike in listings like clockwork in April and May each year, as you can see in the first chart above (though 2012 was not quite a typical year).
On the other hand, if you go against the conventional wisdom and bring your property on in January or February, when there isn’t as much competition, you stand out more. And in a market like this with so little inventory and so many buyers chomping at the bit for a good house, going against the grain can be a solid strategy. Of course it helps if the weather cooperates and you’re not trying to sell your home in a monsoon, so there is that to consider.
If you’ve been thinking about putting your home on the market we’d be happy to help you figure out the best strategy for your situation. Email me at firstname.lastname@example.org, or give me a ring anytime at 415-819-3342.
As I mentioned a few weeks ago, the Mortgage Debt Relief Act was set to expire yesterday, but was renewed in the bill congress passed late last night…big news for sellers considering a short sale. It also included a revival of the tax deduction for mortgage insurance, which had lapsed after 2011, which is good news for FHA borrowers. The Wall Street Journal summarizes the changes here. They didn’t go after the mortgage interest deduction yet, but it sounds like that could still happen so we’ll keep tabs as things develop.
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