Buyers have a right to offer whatever they want. Sellers have a right to sell for whatever they want. And bottom line, property is only worth what someone is willing to pay for it.

But the reality is that very, very few of these offers, to my knowledge, really come to fruition. As the person making the offer usually says, you never know - and they may be right. Perhaps the Seller will take an offer 20% off the list price. And as a listing agent, I always encourage the offer - because you never know, if the buyer gets the counter offer, they may well sign it, and getting a dialogue going is the first step to a sale.

I just checked the ratio of sale price to list price for a number of Marin markets, and the story is almost exactly the same. This ratio measures how much of a discount property actually sells for - so if it is 90%, that means on average, property sells for 90% of the asking price.

In Mill Valley, for the last six months, the numbers are all in the 96% range. In Greenbrae, homes have been selling for 96% to 98% of list price. In Corte Madera and Larkspur, homes are selling for 96% to 97% of list. And in Novato - the toughest market in Marin all year - average sale price is 96% to 97% of list price.

So the vast majority of the low offers don’t go through. The reason, as noted in an earlier post,  is that when properties are overpriced (and plenty of them are!),  the typical pattern is that there is a series of price reductions. When the home hits the magic number, boom - off it goes, sometimes with multiple offers.

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These are 1bd/1ba, with large private patios, and most are townhouse-style two-story units.  Read more about them in the Marin Independent Journal here.

The price is terrific: units began at $250,000, and the most expensive one right now is $315,000. That gets you 545
square feet, newly remodeled with hardwood floors, granite slab counters, stainless steel appliances, recessed lighting, and lots of other details you wouldn’t expect in a unit that cost twice this much.

Located just off Shoreline Highway in MIll Valley, the complex is quiet, with lots of trees, yet is still 10 minutes from the Golden Gate Bridge.

The closest Mill Valley comp I can find right now is a 1bd/1ba condo in Shelter Ridge, for $425,000.

The first sale closed last week. Three more will be on MLS within the next couple days. Call for more information - this is the best deal in Southern Marin, and a great chance for first time buyers to stop paying rent.

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Fear of Loss.

This house in Larkspur, on the lagoon, has been going through the normal sales cycle in Marin right now.

It’s been on a little over 100 days, and had a couple of price reductions. It went into contract recently with two offers.

This has been happening quite a bit lately. It also happened on a fourplex on Mission in San Rafael this week.

What happens is that buyers wait and watch, wondering if the price will fall, but they still really want the property. Suddenly, someone else decides they want it. They have to have it also - either they really do want it, or the fact that now someone else does also makes it more desirable.

Boom. Multiple offers, even after 100 days on market.

Remember, if you’re watching a property, you may not be alone…….

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Currently, percent in contract is 15%. That’s up slightly from last week when it was at 14%.

We are getting the sense that it bottomed out. Besides the rise in the stats, we also had vastly increased traffic at our open houses last weekend. In our sales office, activity has picked up a lot in the last seven days. (We work in the largest office in the county, so while not a perfect statistical sample, it is often on target).

And there are other stories. We strongly considered a house in San Anselmo for a client, 124 Woodland. It went into contract with eight offers!

It’s a great lot, great location, and that story holds true throughout the Southern and Central parts of Marin.

As of 9/14, when we pulled stats by town, Corte Madera and Mill Valley continue to be the strongest markets in Marin County. Both were at 23% in contract, so they are technically buyer’s market’s also.

Novato is a tough place to sell a house right now, as 10% are in contract.

This is a great opportunity to be looking. Deals are out there, everywhere, at all price levels, as the numbers are about the same for all price ranges.

As always, for more detailed information, please feel free to contact me.

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Hot topics to be sure, but the leader cited a remarkable statistic:

97.4% of all mortgages in the US are current.

You don’t hear that on any of the news channels, because it’s not news.

Maybe it should be.

Undoubtedly, in Marin County, that number is higher. There are some foreclosures, but they are few and far between.

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As noted here a few days ago, the Fed rate cut has not affected interest rates.  My good friend Rob Chrisman, who is big hitter at a local mortgage company and issues a great newsletter every morning sent this link, which helps explain the relationship, or more importantly the lack of a relationship, between the Fed’s discount rate and long term mortgage rates.

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I really, really, REALLY wish I could say that mortgage rates will come down immediately, but I doubt it.

Mortgages are usually  a function of the 10-year treasury note.  What has happened recently, however, is that the spread - the difference between the 10 year note and mortgage rates - has increased dramatically, as buyers of mortgages are now asking for a higher risk premium. The Fed cut won’t necessarily affect the 10 year rate, at least in the short term.

So what can we expect?

Hopefully, an increase in consumer confidence, for one thing. People like to hear about interest rates going down, not up, and that makes them more confident about buying things, like homes.

Realistically, it will also put a little more money in people’s pockets. The rate affects credit  card interest, and home equity loan interest, and those will become cheaper for many people, so monthly payments will get a little easier.

Finally, it will also put a little more liquidity, i.e. money - into the financial system, which will eventually affect the amount of money available for loans.

None of these changes will happen overnight, but this is hopefully the start of a trend that will continue to put money into the system, and make credit a little easier for homeowners.

Today’s Buyers Market will eventually shift back to neutral, the question is just when?

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He purchases remodel projects, scrapes them, and builds new homes in their place. He’s done very well over the years, and we’ve done a number of transactions with him.

When he called, he said, “I want to make sure you’re looking really carefully at property right now. This is the time to buy, and there are going to be some great deals the next few months.”

I totally agree. In fact,  we closed on a remodeling project two weeks ago that we are sharing with a partner.  (Marin County real estate sales were down 26% in August, by the way.)

But don’t take it from me. Take it from an expert, my client, who has made a enough money over the years to be very comfortable.

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We are counseling a number of clients right now on both the buy and sell sides on how to navigate through this. In the long term, this will be seen as a minor blip in the market.

Here is the most important strategy for Buyers right now: we are recommending that buyers negotiate the actual funding of the loan as a contingency in all transactions.

This is a major change from the normal course of business, and may cause some issues, but it is very important. Typically, the approval of the loan, or the removal of the conditions for the loan, will trigger removal of the loan contingency. And in a normal market where lenders approve loans and fund them, it works fine.

The issue now is that because secondary buyers of mortgages aren’t buying them the way they used to, not all loans are funding. Typically a loan funds the day before closing. So the result is that one day before close, there is no money to close the deal, the buyer can’t close, and either must find new funds or is in breach of contract.

There are few good outcomes in this situation. Worst case scenario, you could lose your deposit. Best case, you get extensions, find another lender, and try again - not exactly a low stress procedure either.

There is money out there - one of our clients closed a jumbo loan last week, and homes are selling every single day in Marin.  Qualified buyers can get funding, and remember, every market shift creates opportunity!

This simple strategy will protect your interests, and your peace of mind.

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Inventory has been climbing, but shrank a bit the last two weeks, as there are 1258 homes available as of 7/15/07. Corte Madera, Larkspur, and Mill Valley are the strongest markets, and let’s just say it’s a tough time to be selling a home in San Rafael or Novato.

Anecdotally, we continue to feel the difference in the marketplace. To be sure, well priced properties sell quickly - our listing at 32 Fern in Kentfield is now contingent, after just 10 days. But in reviewing the hot sheet every morning, the number of price reductions continue to rise; by the end of the week, reductions usually outnumber the number of new listings.

Negotiations that used to take a matter of hours, with agents frantically sending faxes and emails to get signatures on counter offers, now take two or three days.

Buyers are taking their time in most cases, comparing properties to find just the one they want. And lots of properties that are in contract are falling out, as stubborn sellers refuse to negotiate, and frustrated buyers move on to the next deal.

All in all, it’s actually not bad. In fact, it’s great - we’re having a blast. Our business is very strong. My wife just went to war for two days with a title company that was incorrectly charging our client $3000 - and she won. I have clients buying a property that has been on market for a year and a half - they’re paying nearly 25% less than the original asking price. Smart buyers are getting good deals, and if history is any judge, they’ll do just fine.

Marin County - Percent in Contract 23%

Under $1 MM, Percent in Contract 24%

$1mm-$2MM, Percent in Contract 27%

$2MM+, Percent in Contract 15%
For a complete rundown, and comparisons to last year, please contact me at bravasio@fhallen.com. And remember, we’re never too busy to help with any of your real estate needs - call for information, advice, or a market analysis.

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