Novato Real Estate Market Update (May 2009 Home Sales Report)

May 13, 2009

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 has remained very steady over the past 3 months. Just 151 single family homes are currently for sale. There were 152 homes for sale in April 2009 and 142 in March 2009.

Novato’s absorption rate (e.g., the number of months of inventory currently available in Novato) again dipped dramatically. In March, Novato had 7.9 months of inventory, in April there was 6 months inventory, and today there just 4.97 months of inventory. Absorption rates and the days on market averages provide a telling insight into the overall state of the market. Today’s shrinking inventory evidences pent up demand and reflects increased affordability for Novato real estate. It is also noteworthy that the absorption rate calculation does not increased “contingent” properties as sold properties. There are another 83 homes in escrow in Novato. More on this striking statistic below.

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 thirteen active listings priced under $400,000 (Novato is Marin’s “Valhalla of Value”). In addition, there are 26 homes priced under $500,000. Note that available inventory in these price ranges is way down and the percentages of homes in escrow is rising. For example, 63% of homes in Novato priced under $500K are in escrow; 51% of homes between $500K and $600K; 33% of homes priced between $600K and $750K; 30% of homes between $750K and $1 million; and 25% of homes priced between $1 million and $1.5 million. These are some strong numbers!

Real Estate Market Chart by Altos Research www.altosresearch.com

My prediction relating to phantom buyers (I’ve been talking about this for a year now) 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 WAY 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. This past month, even the move-up price band in Novato (with homes priced between $750K and $1 million) is going great with 30% of these homes in escrow.

Twenty-five Novato homes sold in April 2009 (same as March 2009). These Novato homes averaged about 146 days on market, were about 2,120 sq. ft., and sold for an average sales price of $589,000 (roughly $287 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, I had two closings last month and another scheduled for this month. From my perspective, the market seems pretty active.

Below is a breakdown of the Novato real estate market by price band: 

Price Range

Total Homes

Pending Listings

Up to $500K

71

63%

$500K – $600K 33 51%

$600K – $750K

49

33%

$750K – $1 mil.

56

30%

$1 mil. – $1.5 mil.

32

25%

$1.5 mil. & Up

17

12%

 
For an 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 the HWY 101 widening project has been completed on both north and southbound lanes, 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.”

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.