Not sure why, but the Independent Journal website did not post their March sales numbers until just a few days back. Whatever the case, the news was interesting. After that great run of three months there was a slight correction, but only slight.
The median price dropped in March to $680,000, a drop of 12.7 percent when compared to March 2011. However, sales are up 10.5% from last year. We are still very much in a seller’s market, with homes in contract topping 49% again¸ a pretty amazing number when you consider that 35% and above is a Seller’s market.
I am attaching links to two different articles; one, the article from the IJ, and two, a commentary from RPM Mortgage about trends and directions in interest rates. For anyone interested in Marin real estate, both are well worth the reading.
The multiple offers just keep on coming. Strange to be saying that again, but I am.
The lowest price points are on fire, especially in central Marin, where a good home is gone in less than a week. The wave of multiple offers is extending into higher priced homes as well, embracing the million and occasionally million-plus homes. Are the homes really too good to pass up? Example: I just had a listing (which is about to go into contract) where I had 7 agents calling saying they were planning to write up offers. What? That’s crazy!
But I see a possible “backlash,” if that’s the right word. There are so many offers gathering around any decent new listing that many of the buyers drop out before even touching pen to paper. I had one buyer ask to write a full-price preemptive offer if we promised to accept it and not have an open house. No, afraid not. The agent said her client had been in four other multiple offer situations and was just plain fed up. The very next day one of the seven planning to write called back and said the same; too many bidders, too likely to go over asking. They dropped out.
You’ve heard it before…too little inventory…We have just over a 2-month supply; normal is a 5-6 month supply.
So, the backlash: many buyers may just go back on the fence until more inventory appears, but I don’t see that happening unless there is a flood of foreclosures on the market. Fewer active buyers? If that does happen, it might make things a bit more manageable. Buyers have a little more time to choose, Sellers still sell their house, but unfortunately for them, just not with the inflated prices.
The next few months will be very interesting. My question is: will we see this frenetic market roll right into the summer, when normally you’d see a seasonal cooling in time for vacations and such? That will be an indicator everyone will want to pay attention to.
Kind of off subject, attached below are some links to some interesting articles.
I’ve added a link below to an article from the KCM blog about bumps on the road to a recovery. While one month’s good news does not make a bull market, nor does one month of stumbles make a bear. It’s a long process and has to be seen as part of a bigger picture.
Add to that one fact that IS a constant: the desirability of home ownership here in Marin. Supply and demand. People want to live here and always will. There is only so much growth that can happen, and most of that is in Novato. There just isn’t the space.
To read the complete article, select the link below:
After a week of less than stellar economic news, the inevitable questions come to mind: is it a stall or just a mini-stumble?
Here’s the list: Retail sales were up (the only good indicator of the bunch); housing starts down, jobless claims up, existing home sales down, new home sales down, housing prices down. Here’s a link if you want to read more…
Irrational exuberance…Remember that phrase? The famous warning uttered by Alan Greenspan implying that the market might be overheating…
After an exhausting day of touring the new listings, I will begin by saying that what I said yesterday still holds true today. It didn’t matter if the home I previewed was $900,000 or $1.4M; if the house was a good value, the agents were asking when offers were being accepted. From where I sit we appear to be in the middle of a mini-frenzy.
So here’s the real question: Is this the beginning of a sustained recovery or is it another bubble destined to pop?
Now you’re thinking, I just read the housing report; it wasn’t very encouraging. Perhaps, but that’s a national report. Hate to bring it up again…Marin County doesn’t follow the norm. But is it another case of…Irrational Exuberance? I don’t know, and I won’t predict.
I’ve been dancing around what appears to be staring me in the face, namely that real estate in Marin is on a big rebound. Up to now, I have assiduously avoided making grandiose claims about the improving market. My claims won’t ever be grandiose, but…
True story…Three of my buyers in three price ranges all found the home they wanted, three new listings, but despite my warnings, they hesitated. They were too busy to act, wanting to see the homes a second time, hadn’t talked to a mortgage broker, etc. Besides, things can’t be that crazy, can they? Five days after seeing the houses, all three are in contract, having received three or more offers, some with back ups. Should I have been more insistent? Perhaps, but does anyone want to come off sounding like most people’s perception of a Realtor, some pushy person saying “Buy, buy, buy before it’s too late!” No, I’d rather not. Is there a lesson here? The obvious one is: if you’re serious about buying a home, get pre-approved and, as painful and foolish as this may sound, be prepared to consider an offer after only one viewing, especially if the agent says “We’re looking at offers on Tuesday.” The good news is, you can always change your mind.
Tune in next time for: More thoughts on this unfolding drama, where I conjure up the ghost of Alan Greenspan, scary as that might sound.
Parting thoughts? Gradual improvement. Slow rise in prices at the higher end, continuing flat and possibly diminishing prices at the low end due to years of backlogged forecloses and short sales. Rise in interest rates if inflation becomes a concern. Marin will continue to buck the nation’s general trend as employment will improve in the Bay Area before other areas (we’re already seeing that). Continued strangled inventory as large numbers of owners will not budge until they see a lot more gain. Advice? If you’re a Buyer and you really want to buy a home, you had better be ready to act if the right home comes along. Get all your mortgage/loan homework done. Seller? If you’ve got to sell, you’ve got to sell. The bright side of that equation is that if you’re planning to move up or down anywhere else (outside of Marin County), the prices will likely have fallen even more where you’re moving, making the entire sell-buy transaction a winning one for you, something sellers often overlook.
You may have noticed the name “Team Marin” appear on the Marin Real Estate blog Home Page. Recently the site’s founder, Mark Lomas, joined forces with longtime colleague and friend Ed Gutekunst to create Team Marin.
Ed is a lifetime Marin native and a successful real estate agent who specializes in the listing and sales of homes in southern and central Marin.
It’s been nearly a decade since Ed came to the real estate business after a long career in the film and video industry, where he was involved with the marketing and sales of high-end special effects and editing products.
Working in the Sales and Marketing side of the business allowed Ed to combine his passion and excellence in writing with his exceptional talents as a graphic designer, fine artist, film and video editor. The merging of Ed’s marketing and creative skills with outstanding sales and interpersonal abilities have translated into an unbeatable combination when working in the multi-layered world of residential real estate.
Sales of single family homes were up three months in a row when compared to the same month a year earlier. The key factor governing these sales is the dwindling inventory of homes.
There are plenty of buyers, but there are no homes to show them. Homeowners are betting that prices are inching up, and are trying to hold out for a substantial increase before listing. The strong demand for homes is between cash-heavy investors and first-time homebuyers. Their thought is: I can buy a $200,000 condo that was $500,000 or $550,000 just a few years ago. No brainer.
The news is so good that many agents and realtors expect the trend to continue straight through the busy spring buying season.
Read the week’s list for March…Factory orders…Duarable goods (goods that will last at least three years), Capital goods (goods used to create other products), Inventories, and Jobs. Well, the first four were all up, raising confidence and expectations, but when the jobs numbers came in, although there was a good net gain and unemployment dropped to 8.2%, the number of jobs wasn’t as good as the month before or good enough to create that wonderfully rising parabolic curve of a steadily improving economy. Is this kind of a three steps forward, trip on your shoelaces, but no steps back?
To answer my question posed in the title, yes, the indicators were good, though they could be better.
Following that last IJ headline I posted, I decided to follow some of the numbers. What I found was surprising and, for the first time in quite a while I might risk sticking my neck out. Over the past few years I had felt bludgeoned by the constant chirpy, upbeat announcements by realtors, agents, MAR and CAR, kind of a de facto optimism that I don’t think served the Buyers or Sellers well. As you know by now, I try not to prognosticate, and will not do so today, but…but…the news is decidedly good. But will it persist? Again, for the first time in many years, I think it might.
That’s what the headline in the IJ said. And it was almost identical to the headline one month ago: “Marin home sales, prices rise in January.” Wow, good news two months in a row, with the median rising over 15% year-to-year, and sales increasing 16%. Does that seem right to you? Well, first of all, it doesn’t include condo sales, but if you want the whole story, read on and see what the Marin IJ has to say…I don’t know about you, but I’m feeling a lot better.
Yes, it’s true. The attached article paints a national picture, though it’s starting to happen right here in our own backyard. Interesting stuff, to be sure. While I had not heard from anyone regarding Seattle or Miami or D.C., I have heard from a number of people that the peninsula is heating up. However, it’s largely because there isn’t any inventory at all, so anything nice is drawing the buyers like bees to honey.
While I believe most people think the economy is on the mend, I am also seeing the “I’m not going to be the first one to jump into the pool” mindset. This refers to Sellers more than Buyers. I know the Buyers are out there; I keep hearing from them, they keep looking, they’ve got the cash or can get the loan. The problem is: There’s just no inventory to choose from. So why aren’t the Sellers selling? Think abut it. It’s hard selling a big asset that only six years ago was worth 30-40% more. Who wants to take that kind of loss in payout? Would you?
The list of Sellers I have who are planning to sell at some point in the future want to wait. How long? Until they see some upward movement, some recouping of their “paper” losses. Even if the floodgates opened and untold numbers of Buyers started writing offers, it would still take time for the demand to translate into rising prices. And until we see those rising prices, it is unlikely certain Sellers would see the numbers they’re looking for.
So what am I saying? The recovery in value will be slow, but the demand for homes will rise as the economy recovers. My mantra about Marin has always been two simple words: supply and demand. People want to live here, and the only place in the county with room for new housing is in Novato. If you want a new house in central or southern Marin, you will probably have to tear down an old one. And as long as there is that demand, Marin will hold its value longer and in bad times will lose its value slower. All in all, a great place to invest and an even better place to live.
You might be wondering when those rates would finally start to rise. It couldn’t happen until the economy showed signs of improving, right? We’d see it coming, no? Not really.
Rates continue to move upward in response to fears of inflation that may accompany those glimmers of economic growth. The better the economy, the more pressure on rates.
My only concern for Buyers is that we are reaching an important junction where prices are not going up, but interest rates are. Think Cost versus Price. When buying a home you always need to consider cost, which is a combination of price and interest rate. Sometimes the lower price isn’t always the best if the rates are higher.
Housing starts in the U.S. hovered in February near a three-year high and building permits rose, adding to signs that the industry at the heart of the last financial crisis is stabilizing.
The Marin Real Estate Weekly Indicators, and The Buzz among Realtor types…
What do you think?
I drive around and look at the new inventory and hear the agents yakking…I sit in on sales meetings and listen to even more agents. I’m on information overload. Inventory continues to be at a minimum, the number of homes in contract is soaring into the high 40’s, and everyone says they have buyers just itching to buy. The monthly economic indicators released recently were positive; housing starts, consumer confidence, retail sales, jobless claims.
So, my question to you is: do you buy it? Things certainly seem to be looking better out there in the rest of the world, and they certainly are getting better here in Marin. Is Marin an aberration, a bizarre anomaly in a fishbowl that follows no other drummer? Well, yes, to a certain extent it is. But Marin is also a harbinger. Similar to San Francisco and the Peninsula, good news typically starts here at the center, and radiates outwards. But is it a sustainable trend, or another quick start out of the blocks only to stumble ten yards down the track?
I for one am feeling good for the first time in a long while.
Last week of the 1065 houses and condos on market, 49% were in contract! That’s insanely high. In the last month the percentage in contract has gone from 46 to 47, 48 and now 49. Is it a sign of demand bursting at the seams or of an inventory so low that it skews the numbers? It’s both, I believe. It should be a crazy Seller’s Market, but it doesn’t feel that way.
What I’d like to hear are your views? Gut feelings? Number crunching? Real-life experiences? Tell me what you think of the market here in Marin, but don’t limit it to that if you don’t want to.
So what to make of all the real estate and economy buzz? In case you’ve just returned from your extended vacation under a rock, you probably know that the Consumer Confidence Index has improved, that 225,000+ jobs were added last month and, to top it all, Warren Buffet comes out with an exhortation to buy as many homes as you can afford. Okay, that sounds good, but what should you do? Rush out and buy something?
First, let me say it: I think all the news is great. And then let me follow up and say I like to err on the side of caution. As I’ve said before, I don’t have a crystal ball. Still, from where I’m sitting, I’m feeling the first twinges of real optimism in a long time, but that optimism can easily be overturned by any number of unexpected national or international events. Sure, everyone wants to get into the market at the absolute bottom and ride whatever uplift to the max, but this I seldom possible, except by chance. Any definitive evidence of economic change cannot even be confirmed until 3-6 months after it happens.
All that being said, there is increased activity, the South Bay and San Francisco are really heating up (with Marin to follow?), multiple offers are getting more commonplace. There is a severe shortage of inventory, and well over 40% of listings are under contract (have accepted offers).
So what do I see? Again, no crystal ball, but whatever improvement we see should be slow and gradual. It still hinges on jobs and confidence. So if you want to get in on it, do it when you really feel the confidence yourself, not solely on an impulse.
Want to read some of those articles I mentioned? Select one of the links below.
* Stop reading now if you are even remotely humor impaired or comedically challenged!
Yesterday’s man or woman used to think, “if I need to find someone this way, I’m already lost!” But today, someone might say, ” I don’t have enough time to drive around and look at all the open houses/a potential homebuyer’s version of “speed dating”, so maybe I can use this service!”
We’ve all seen those ads for E-Harmony - where this scary looking guy comes out and tells us how great his dating service is, and then tries to convince us that it’s all scientific, and that people are matched on 92 points of compatibility! Yeah, right … E-Harmony people are just regular folks like yourself, not circus freaks, drooling sexual perverts, or couch humping Scientologists. (Perish the thought) The product of your union wil be an “Everlasting Love!”, not some head revolving, vomit spewing, bed wetting, priest cursing, ungrateful devil child, that you’ll have to support till you’re 18. (okay, maybe I have some issues) But … if you’re still a hopeless romantic, a word of advice … look beyond the curb appeal! Speaking of which … matchmaking and the promise of finding that perfect property is also here today!
No doubt every prospective buyer, seller, and real estate agent has heard of the Multiple Listing Service. The real estate agent’s “on the make” equivalent of a dating service. Real estate agents even have their own codes to help inform potential suitors. Possibly E-Harmony might want to implement this kind of methodology, as you’ll soon see, into their 92 reasons to run for the hills! (The following is gender specific … feel free to substitute whatever gender makes this PC for you … or not!)
*New: A new listing! The competition will be lining up for the first dance! A new listing has that “special glow!” … for now.
*Active: Active listing. This gals has been danced around, but so far, no one wants to marry her.
*DOM: Days on the Market. Everyone watches this number, like the date on a milk carton. It is an indication of freshness. The longer she sits on the shelf, the less desirable she becomes.
*CC: Contingent, but continue to show. She says she’s engaged, but there’s no ring on her finger - the “due diligence period.” The wedding may still be called off, especially if the finances don’t measure up!
*BOM: Back on the market. ewww…something could be wrong here. Definitely not a first choice. But if it’s 2a.m., and you’re drunk out of your skull and getting desperate, she might look pretty good. Of course, you may have to overlook that little hump, the lazy eye, and her spooky resemblence to Karl Malden.
*TW: Temporarily withdrawn. She’s not pretty, and she knows it. She realizes that if she wants more interest, she’s gonna have to get a face lift, fix herself up, start going to the gym, and maybe buy a wonder bra.
*EXPIRED: Listed, but never sells. She thinks she’s Paris Hilton, but she looks more like Yoda after a night of heavy drinking.
*PENDING: Okay, she’s bought the dress, had the rehearsal dinner, picked out the china pattern, and the wedding march has started. Potentially the groom can still back out and run screaming up the aisle. (Of course, such things usually only happen in the movies … still, there’s always the chance.)
*SOLD: They’re married! Happily? Who cares!? It’s re-harmony! (Cue music) ” This will be an everlasting love …”That is, till he discovers that she has a raging case of dry rot in her basement, terminal fung sway, and a sagging back porch.
Oh well …
Sausalito Tugboats with the Sleeping Maiden’s full figure in the backdrop(Mount Tamalpais)Marin County Real Estate Blog 2012
Some interesting numbers on the yearly sales from Marin. As I mentioned in an earlier post, while we seem to be drawn to the splashy headlines late in every month when the monthly sales figures come out, these are only indicators, small cogs in the larger wheels that are grinding out numbers on a yearly basis. We’re always looking for patterns to indicate trends. One month is never a pattern. Especially when there are seasonal patterns to contend with. Typically, Spring is the busiest season, followed by Fall, Summer, and then Winter, so any one month spike or dip can often be attributed to a seasonal variation.
Every year I wait to see how the yearly numbers went. And here they are (a slice from 2003 to 2011)
The number of sales peaked in 2004 and went into a four-year decline. Since 2009 the number of sales has steadily increased.
The Average Price peaked in 2007, declined for two years, made an effort to climb in 2010, and then slipped again in 2011.
The steep declines in price can be attributed to the large volume of distressed property sales (short sales and foreclosed properties) which dragged the prices down. The prices continued to slide when investors and first-timers saw a bottom in sight and began to scoop up those same properties in greater numbers. And now we have a shortage of inventoryAnd if this year is any indication, the number of sales will continue to increase, but it’s really too early to tell.
BTW, if you ever want to know about the yearly sale in a particular town, just drop us a line.
Has it only been a month since that Oooops headline made us wince? What are we supposed to make of an IJ headline like this one from February 21st: “Marin home sales, prices rise in January”? While not yet a cause for rejoicing, it is nevertheless good news, and can summarized in a few short phrases: “Increasingly eager buyers and a meager supply of inventory.” In addition, let’s not gauge any market change by what happens in January, typically one of the year’s two slowest months. But I am hearing talk; people are almost afraid to say it, but many of them think the market is picking up.
After reading Cory’s well reasoned comment to the “Oops!”
posting on February 1st, I wanted to add something along the same
line, something that is often left out of discussions of recently published
real estate articles, whether they be in the IJ or the Wall Street Journal. Too
often we browse a news site, pick up the
paper, or open a magazine to be floored by the headlines shouting at us is bold
type, trumpeting either a devastating collapse or a dizzying rise. At the end
of the day, all those outlets want one thing: readers. And the best way to
attract readers is with the headline often followed by some exaggerated
speculation. Read a little further and either the news is not as bad (or good)
as the headline suggests, or else the premise of the article isn’t founded in
enough facts.
Typically, articles about a particular region’s real estate
health are one-month snapshots, i.e. how January compared to December, or how
January 2012 compared to January 2011. While these changes do provide useful
information, I think they often ignore the big picture, and do not take into account
larger statistical trends. In other words, it’s far more important to know how
the year compared to past years than how December compared to January. Monthly
variations can be so easily skewed by a number of factors: seasonal changes, bad
weather, a large, one-time bump in big-ticket sales, international politics, a
mortgage rate blip, etc.
So while we like to add links to recent articles, I think
they should never be taken as gospel. Like Cory said, “If anything, it was a
marginal price decline, but not worth making a big deal out of.” Most important
is to read what others are saying, however much we agree or disagree, because
all too often media outlets have a subliminal effect on people’s perception of
reality. Remember that old saying “If it’s in print, it must be true.” Sadly,
perception all too often becomes reality. Rather than accepting the flurry of
opinions at face value (mine included), questions them; keep those comments
coming and we’ll all benefit from the pooled knowledge.
