Novato CA Real Estate Market Update (June 2009 Home Sales Report)

June 12, 2009

There are 141 single family homes are currently for sale in Novato, CA (there were 152 in May 2009, 152 homes for sale in April 2009, and 142 in March 2009). This consistency is interesting although I don’t think much can be imparted from it. What is significant, however, is Novato’s ever shrinking absorption rate (e.g., the number of months of inventory currently available in Novato). Last month I noted that Novato had enough homes to last about 5 months (this is very low for Marin in today’s market) and much lower that the 7.9 months worth of inventory in March 2009. This month, the absorption rate fell to an unbelievable 3.04 months. That is low. Absorption rates, along with days on market averages, provide a telling insight into the overall state of the market. And today’s shrinking inventory and exploding sales I talk more about this below) evidence a pent up demand and reflect the increased affordability of Novato real estate. It is also noteworthy that the absorption rate calculation does not increased “contingent” properties as sold properties. There are another 78 homes in escrow in Novato that are considered active.


As I have noted before, value properties can be found in virtually ALL price ranges. Pricing in most Novato neighborhoods is back down to what it was in 2002-2003. Novato currently has eight active listings priced under $400,000. In addition, there are 16 homes priced under $500,000 (there were 26 last month). Note that available inventory in these price ranges is way down and the percentages of homes in escrow is rising fast. For example, 72% of homes in Novato priced under $500K are in escrow (up from 63% in May 2009); 48% of homes between $500K and $600K; 52% of homes priced between $600K and $750K; 22% of homes between $750K and $1 million; and 22% of homes priced between $1 million and $1.5 million. These are some strong numbers! If you would like to see just how strong, compare any price range in Novato against homes in other Marin County, CA towns and cities.

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) has come true. Here it is: 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, while they are up a point in the past 6 weeks, remain low by historical standards and so buyers are jumping in. Additionally, the first time home buyer credit is helping first time buyers. And finally, I think people are beginning to realize that inflation is coming (along with significantly higher mortgage interest rates). I’ll bet that this time next year, rates will be at least another point higher (somewhere around 6.5%) and seller financing will be gaining popularity.

Forty-four Novato homes sold in May 2009 (up 43% from April 2009, which saw just 25 sales). These Novato homes averaged about 1496 days on market, were about 1,956 sq. ft., and sold for an average sales price of $564,000 (roughly $299 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.
 
Below is a breakdown of the Novato real estate market by price band:

Price Range

Total Homes

Pending Listings

Up to $500K

60

72%

$500K – $600K 31 48%

$600K – $750K

52

52%

$750K – $1 mil.

50

22%

$1 mil. – $1.5 mil.

32

22%

$1.5 mil. & Up

22

9%

 

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, the commute through San Rafael is very much improved. Southbound commute traffic is reduced by about 25 minutes. 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.”