Marin Real Estate (August 2009)

September 10, 2009 by  

Marin real estate has, it appears, survived the worst of the downturn. While prices are down across the board no matter how you slice it, the road to recovery is in view. Yet, virtually every call I get from potential buyers, at some point in the conversation, eventually turns to short sales and foreclosures — distressed sales remain featured on many buyers’ dance cards. In fact, distressed sales are very competitive and often receive multiple offers. In Northern Marin (a.k.a Novato), 82% of homes priced under $500,000 are in escrow (that’s 40 out of 49 homes!). In San Rafael, 84% of homes priced at or below $600,000 are in escrow (that’s 32 out of 38!). These sales are propelled by value, the $8,000 tax credit, and the increased FHA loan limits which went into effect in April 2009.

Early in the year, buyers were ALL talking about how they anticipated interest rates would go down to 3% (and some buyers were insisting that rates would go even lower). I would just nod my head and concede that was a possibility. After all, what do I know about the unknowable? But, I always pointed out that whatever rates fell to, you could never know the bottom until it was gone. And that rates would surely go back up again — I was not going out on a limb; every economist on Earth is saying the same thing (most believe this will occur by the end of Q1 2010). Sure enough, it seems buyers are picking up on this inevitability and they are out in droves.

Standing back and looking at the higher price bands (especially in Southern Marin), things look a little different. Some sellers still suffer from pricing strategies that prevent them from realistically engaging with qualified buyers. These sellers are either: 1) NOT Sellers; or 2) are getting poor advice and direction from their agents. They will learn that “time on the market” is not their friend. Being a “smart seller” today means negotiating strong terms aimed towards a successful close of escrow within 30-45 days.
The chart below shows a 90-day rolling average of Mill Valley’s new listings and absorbed listings (e.g., sales), comparing current numbers with those of last year. Note that the while the numbers for new listings are about the same, the number of absorbed listings is about equal to 2008. If you would like to review a similar chart for any other town or city in Marin or San Francisco, please let me know.
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