18 Sep Jaime Pera’s Marin Real Estate Market Update – 8-31-17
Jaime Pera’s Marin Real Estate Market Update
August 31, 2017
As we enter the fall selling season one thing remains clear; there doesn’t seem to be anything that can stop this market! Although we are operating at lower inventory levels than past years we continue to see great buyer demand coupled with an all-out determination to aggressively compete for properties, particularly in multiple offer situations. And prices continue to rise! Through August of this year 1,298 single family dwellings have closed versus 1,280 last year. This slight increase in sales however was accomplished with 171 fewer new listings entering the market this year versus last year. So while we can point to low unemployment (3% in Marin and SF), low interest rates (jumbo loans can be had for under 4%), young families fleeing the city for more affordable real estate and better schools, and new stock market highs, what is really making all of this possible is an increase in the number of ALL CASH BUYERS (33% of all solds vs 29% YTD 2016), and an increase in the number of MULTIPLE OFFERS (57.6% of all solds vs 49.3% YTD 2016).
The inventory counts below tell you all you need to know about this market. If you eliminate the pricier cities with average list prices above $3M like Belvedere, Kentfield, Ross, and Sausalito, and all of the Cities of West Marin (because of location) you are left with 183 properties for sale of which 102 (56%) are in Novato and San Rafael, and 33 (18%) are in Mill Valley. For those that are not keen on living in Novato or San Rafael, this doesn’t leave many options.
Source: Bay Real Estate Information Services – Trend Graphics
But help may be on the way as the fall selling season has started off strongly and as of 9/10 the listing inventory for single family dwellings stands at 361, a great sign indeed! I expect more homes to hit the market over the next few weeks, and am thinking that with some luck we may even reach 400!
All Cash Buyers – Where Does the Money Come From?
This is a phenomenon that most people have a hard time wrapping their heads around. In all honesty, I am asked this question at least once a week! Here are the demographics as I know them.
- Comprised of tech workers with healthy six figure incomes. Often times there are two in the household. Additionally, this group has benefited from stock options, stock, and other forms of equity compensation. And finally it’s not unheard of to receive a BONUS that is large enough to purchase a home valued in excess of $1,000,000!
- Baby Boomers as a group have a lot of equity in their homes and have benefited from wealth transfer (inheritance) from their parents. Many became quite wealthy from their own business pursuits often times unrelated to the technology industry.
- Parents and grandparents are gifting and lending cash to their children for the purpose of purchasing a home. Sometimes the children will take out a mortgage after close of escrow.
- Foreign investors from Russia, India, and China. Chinese investors make up a large portion of all cash buyers as they seek safer investment options in the US.
Note to Buyers:
Don’t be fearful about this competitive market. Stick to your plan; know exactly what you are looking for, and how much you are willing to pay for it. Listen to yourself! If the home you are contemplating buying doesn’t feel right and something about the situation makes you uneasy then it’s likely not the right place for you! Here are some mistakes to avoid:
- Moving forward on a purchase out of desperation
- Hesitating on moving forward on the purchase of a property that feels right, causing delays, which results in not landing the home
- Not making your best offer for the home that is right for you
- Over analyzing the situation and failing to make an offer in a timely fashion
- Not having a firm grasp on how much you can afford.
- Making the mistake of working with an inexperienced agent in a competitive market
- Overpaying for a home because you and your real estate agent have not properly evaluated comparable sales in the neighborhood of your target home
- Not learning from prior mistakes
Note to Sellers:
There is no doubt that this is a great time to sell! If you have been considering selling either to upsize, downsize, or relocate, I wouldn’t wait. As I stated above, unemployment rates remain low (currently 3% in Marin and SF), and 30 year fixed rate loans are averaging 3.95% vs 3.64% last year. Furthermore, it is difficult to predict how long this strong real estate market will continue so if you have been thinking of selling this might be a good opportunity to review your options.
For those potential sellers that have anxiety about upsizing or downsizing in a market where there aren’t enough homes for sale, I’m telling you that with good planning and execution and by employing one or more of the following strategies it can be done! For details please see this blog article on my website: http://www.lifeinmarincounty.com/tips-upsizing-downsizing-inventory-constrained-market/
Please call me if you have questions about the Marin Real Estate Market or the value of your home. Upon request, I will be happy to prepare a high quality comparative market analysis and detail the steps you must take to list your home.
Jaime Pera, Senior Associate
415 505 7197 – firstname.lastname@example.org