While the pipeline of new properties and overall inventory levels increases dramatically throughout most of Marin County, CA. (this is the prime selling season, after all), Novato’s inventory level remains at a seasonally adjusted low with just 152 single family homes for sale. There were 142 homes for sale in March 2009. Perhaps we are on the back side of the distressed property curve. Meanwhile, the absorption rate (e.g., the number of months of inventory currently available in Novato) dipped dramatically from 7.9 months in March to 6 months today (note: earlier this year, we were down to 4.5 months due to the large number of sales in December 2008). Absorption rates and the days on market averages provide a telling insight into the overall state of the market. More on this below. 

As mentioned in prior months’ market updates, it seems that buyers are hypnotized and mesmerized by foreclosures and short sales — as if these properties hold some promise of value and an assurance of happiness. But, instead many buyers of these homes would do it differently if given another chance. After all, many of these homes are in rotten condition and entail lots of work. Wise buyers focus on real value and keep attuned to the benefits of homes that display “pride of ownership.” Not that all distressed sales are problem properties, but caveat emptor for those lured by the siren call of distress. Indeed, investors and buyers who have been burned by the short sale process — it can take months if the proper process is not followed or the banks do not issue approvals — are focused mainly on well priced homes without the strings of REO properties. 

Of course, there is ample value out there in virtually all price ranges. Prices in most Novato neighborhoods are back down to what they were in 2003 (and 2002, in some neighborhoods). Novato currently has eleven active listings priced under $400,000 (Novato is Marin’s “Valhalla of Value”). This number is down by almost 33% from two months ago as value shoppers are picking up these investment quality homes. In addition, the number of homes priced under $500,000 is way down — there are just 30 available as of this writing (in this price range 53% of listings are in escrow). There are a total of 99 homes under $600,000 (with, again, 53% in escrow). 

As noted last month, Novato is also experiencing a surge in $1 million and up escrows. In contrast to other parts of Marin County, Novato is experiencing a 26% escrow rate for homes in the $1 million to $1.5 million price range. My prediction relating to phantom buyers is coming true. I hold open houses almost every weekend and I talk to a lot of buyers. Here is my observation: there are LOTS of people who sold over the past couple of years and who have waiting for prices to dip. Fortunately for these folks, interest rates are also down right now and so they are jumping in. Many of these people sold in Southern and Central Marin and see the extreme value and comfortable existence Novato provides. As anticipated, given this trend and demographic, the move-up price band in Novato (with homes priced between $750K and $1 million) is slow with just 17% of these homes in escrow.

Twenty-five Novato homes sold in February 2009 (up from 16 in February 2009). That is an increase in sales of 56%. Compare that the overall number of sales in Marin this year, which is down 60%. Interesting stuff. These Novato homes averaged about 97 days on market, were about 2,050 sq. ft., and sold for an average sales price of $586,000 (roughly $292 per sq. ft.). Homes in Pointe Marin, Country Club, Hamilton Field, Rush Creek, and Bel Marin Keys generated the most calls and showings this past month. If you are thinking of buying, please call my office at (415) 350-9440 as I have a long list of people who would like to sell their homes, but because of market conditions are not quite ready to list their home officially. I am also receiving many call regarding lease-options. Insofar as my listings are concerned, three of five are in escrow and I have an outstanding offer on another. From my perspective, the market seems pretty active.

For a brief explanation of the importance of the statistic addressing the percentage of “Pending” listings, click HERE. If you would like me to run the exact numbers for your neck of the woods or have any questions about Novato’s many delightful neighborhoods, just give me a call at (415) 350-9440. My name is Kyle Frazier, Certified Residential Specialist (CRS), with Morgan Lane Marin Real Estate. It is always my pleasure to be of service.

Now that the southbound portion of the HWY 101 widening project has been completed for a little over a month, it is clear that the commute through San Rafael is very much improved. Even salty, hardened naysayers concede that the drive to work is now just a drive, not a battle–estimates range from 25-35 minutes saved each day since the completion of the project. As I have been saying for 2 years, the improved commute will certainly make Novato a viable choice for those who had sworn it off because of the traffic. Moreover, the first-time home buyer credit of $8,000 (this is a flat out gift from the government) certainly helps those who qualify. As I tell my clients, “Give Yourself a Raise. Move to Novato.”