Marin Real Estate Forecast- Spring 2010
Is the picture rosy for Marin real estate next year? Nationally, economists seem to think so. Inventory nationwide is much lower than last year at this time. Lawrence Yun, Chief Economist for the National Association of Realtors, notes:
- “After a possible activity decline this winter, we expect another surge in spring and early summer.”
- “There is still a pent-up demand from buyers who can benefit from the tax credits being offered on a federal level.”
- “Mortgage rates last month were the third lowest on record dating back to 1971.”
Yun’s predictions are appropriate for the lower tier of the Marin market, but are unlikely to hold true in the high end luxury real estate market. In the last few months, the lower end market in Marin County has seen a tremendous comeback. The tax credits and mortgage rates have given confidence to buyers in the lower end but we have not seen a sizzling comeback is the high end luxury market in Marin County.
Housing inventory is at extremely low levels in Marin right now. In 2009, the months of home inventory dropped from a high of 7.9 months in February to 4.9 in September (normal), to a very low 3.6 months of inventory in November. Fairfax, Novato and Greenbrae have been extremely active markets while sales in upper end towns like Belvedere and Ross remain sluggish. I expect to see a substantial increase in months of inventory in the spring in all price points with strong sales activity in the lower price points continuing while the upper end market will remain slow with plenty of options for buyers.
The properties that will sell in all price points have realistic sellers who understand that this is no longer the market we had in 2005. Sounds like a simple concept except we continue to see unrealistic sellers have their homes sit on the market. Prices have declined substantially in some areas. Sellers who pay close attention to current (not past) values in their neighborhood will benefit.
Posted In
-
real estate school
First I should say that I truly hope the market takes a turn for the best, however, the realist in me says its not going to happen, not yet anyway. Our economy just isn't there yet, there are still to many people out of work, I still see local businesses closing down almost daily and people just don't have the money to start spending on homes at this point.
My business is built around real estate and agents need to make money for me to make money so I hope we can all get a little piece of pie, but for me, it still looks a bit to soon.
Kevin
-
First I should say that I truly hope the market takes a turn for the best, however, the realist in me says its not going to happen, not yet anyway. Our economy just isn't there yet, there are still to many people out of work, I still see local businesses closing down almost daily and people just don't have the money to start spending on homes at this point.
My business is built around real estate and agents need to make money for me to make money so I hope we can all get a little piece of pie, but for me, it still looks a bit to soon.
Kevin
-
rashin
The housing prices in southern Marin are still extremely inflated. We are talking about a year over year growth of over 10% per year from late 1970s until 2007.
The average single family price in Tiburon (around $1,579,000)is over 7-8 times average yearly household income($200,000 per year at the highest) in Tiburon.
The unemployment rate in Southern Marin is around 9% and please remember that many families in Marin have only one provider, many women are stay at home mothers.
Over 50% of Tiburon, Belvedere and Mill valley properties were refinanced at the height of the bubble with exotic mortgages.Many of these mortgages will reset to adjustable rates in 2011-2012.
In a healthy market the housing prices are about 3-4 times yearly salary of the buyer after 20% down payment. Of course no one has heard of that type of pricing in San Francisco Bay Area and especially not in southern Marin for decades.
The lending standards have really changed. The banks can not repackage the jumbo mortgages and sell it off to the Wall Street any more. Unless banks come up with more shady mortgage products like the no doc. type of loans, it will be hard to get rid of the huge inventory of the over 1 million dollar houses in Tiburon, Belvedere and Mill Valley.(Not to mention the distressed properties that add up to over 160 for the Tiburon and Mill Valley combined as of March 4th 2010, although no one will admit there are so many distressed properties in southern Marin).
I am amazed that more articles can not be found about the huge Marin real estate bubble. All the information on the internet is from real estate agents that pretend there are some great bargains to be made here just because the prices have come down about 20% from the height of the bubble.
No area is recession proof and not even the average household salaries of Tiburon and Belvedere can justify the pricing. In my opinion the prices can only go down from here. Especially after the interest rates start going up.
Leave a Reply
Additional comments powered by BackType
3 Comments »