It has been a difficult year for Marin real estate. Total unit sales are off 35% for homes, and 38% for condominiums. Condominium average sale price is down 10%. Some realtors are learning new phrases, like “Did you say one or two shots of espresso in that latte?”

We see stability creeping in, however.

First, the percent of homes in contract has consistently stayed at the 23% level for two months now. That’s almost a normal market, and that number is staying consistent even though inventory is higher than it has been in years.

Second, Novato and San Rafael are two of the strongest markets in Marin County right now, with 27% and 24% of homes in contract. That’s important because these were the first two markets to really start to have problems when the market started to decline. It’s also important because combined, these two towns represent half the inventory in Marin County.

Why the strength here? According to agents who specialize in the area, Novato sellers are adjusting expectations, and pricing accordingly. In other words, they’re further along the learning curve, and adapting to the changing market.

Finally, we’re feeling an upsurge in buyer activity. We’re suddenly getting lots of calls asking about our listings, after a very quiet May. Maybe it’s just that school is out, maybe it’s a blip, but it’s fun anyway!

As always, call if you would like to receive our weekly updated market statistics.

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We’ve been tracking percent in contract for over three years now, on a bi-monthly basis. Below 25% is a Buyers Market, and we’ve been there since mid-June.

Things bottomed out in mid-September, when percent in contract was 14%.

It’s been climbing slowly and steadily since then, and now sits at 21%. And it’s not just inventory being pulled from the market, either. There were 171 homes in contract 9/15, and as of 11/15 there are 248. It’s unusual for that number to be trending up at this time of year.

Central and Southern Marin real estate are the strongest markets, lead by Corte Madera and Greenbrae. Novato and San Rafael continue to be the weakest, but there have also been good upticks in activity there.

Most interesting is that homes under $!,000,000 represents the strongest segment, where 22% are in contract. That reverses again what has been happening in the first half of the year.

Why now? Asking prices have certainly come down a bit. Interest rates are historically low. There are some great deals out there, and Buyers are figuring that out. And life goes on - people still need to move, as they get married, have babies get new jobs, etc.

As always, contact me for a full report, or if you’d like to know where the hot deals are right now.

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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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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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In case you missed the news of the last two weeks, interest rates for mortgages have increased dramatically the the last two weeks. How much?

A conforming 30 year fixed is now around 6 7/8%, and a jumbo is 7 1/8%. That’s almost a half point move from two weeks ago.

What’s this mean if you’re looking at buying a house in Marin County?

First, start looking at other instruments besides the 30 year fixed. Adjustables are starting to make sense again, if you have a substantial down payment and your prospects for increasing income are good. The spread on the jumbo for an adjustable is now almost a full point.

Second, if you’re thinking of buying a home in Marin County, think carefully about your time frame for owning a home. If you’re going to be there for more than a couple years, it still makes sense. Why?

Historically, Marin County prices do not decline substantially. If history is any indication, they rarely do - only twice in the last 41 years. So if you buy now, your chances of massive depreciation are slim.

If interest rates do indeed continue to increase, as many are now predicting, you’re better off locking in now. Selection may be better six months from now - but if prices don’t pull back, and rates continue to climb, you could be priced out of the home you really want.

As always, please contact me for more information or up to date market statistics.

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On the other hand, we’ve been looking at slowing sales and increasing days on market for the last four weeks, so what’s really happening?

Things have definitely cooled off from a month ago, when percent of homes in contract was 30%. It fell to 26% two weeks ago as inventory spiked, but has seemingly leveled a bit, now at 27%. That’s still a balanced market in our book, although getting close to the 25% level that delineates a buyer’s market.

We put a great house on the market three weeks ago, priced to sell, and waited for offers. Nothing happened. We had another open house. Still nothing. Then, in the third week, we received three offers in one day! The house went for well over the asking price of $1,049,000.

Our sales office had 31 sales this week, which is a very big number, and nine of those sales had multiple offers. One, a $4MM house in Kentfield, had nine offers!

So what does all of this mean?

Great homes, in great neighborhoods, that are priced well, will sell quickly, in any price range. If not, it’s more of a struggle. There are plenty of expired listings out there. Inventory is high and there is, by Marin standards, a lot to choose from.

Sellers: if you’re motivated and ready, you can sell your home. If you’re not, get ready for a long slog.

Buyers: the 30 year fixed is still around 6 1/4 %; inventory is out there. If you see something that’s really great, get ready for multiple offer time. No one likes it, including the agents by the way - but it is a reality.

Here are the numbers:

Total Available      In Contract      %In Contract

Total                   1,287                   337               27%

Under $1MM         695                       184              27%

$1MM-$2MM         390                       114              30%
$2MM+                203                        39               20%

Average Days on Market: 67

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As of 4/15/07, percent in contract was 28%, down slightly from 29% two weeks ago. Inventory continues to rise, now at 1,105 for total homes on the market. When percent in contract is below 25%, it is a Buyers Market; between 25% and 40%, a Balanced Market; over 40%, a Sellers Market.

Kentfield, Larkspur, Mill Valley, and Fairfax all have over 40% of available homes in contract - technically, a Sellers Market. Greenbrae numbers are at 24%, but that number is a artificially low because of the number of condominiums in the sample.

The percent in contract for the county has been relatively steady since the end of January, as the market continues to absorb new inventory relatively quickly. This is exactly the pattern the market followed last year, and then in May and June last year, sales started to slow down faster than new homes became available. We’ll watch closely to see what happens here.

Some key data:

Total Homes Available: 1,105

Total In Contract:           314

Homes Under $1MM:        599

Under $1MM, in contract: 180

$1MM-$2MM, available:     334

$1MM-$2MM, in contract:  95

$2MM-$3MM, available:     172

$2MM-$3MM, in contract:   39

As always, please contact me at bravasio@fhallen.com if you’d like more detail and a complete report.

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Anecdotal evidence is everywhere - lots of traffic at open houses, lots of inquiries activity on our listings, and houses selling after just a few days on market, often with multiple offers. We work in the largest real estate office in Marin, so we have a pretty good indication of what’s happening out there from our agents.
And there is some factual evidence. Our brokerage firm, Frank Howard Allen, is running significantly ahead of last year’s numbers for January. Homes in Greenbrae have been selling quickly, and one of our clients just got into contract on a Corte Madera condominium that had four offers, all at asking price.
It’s only one month, the weather has been great, it may be a blip- who knows.

But if you’re interested in buying a home, stay focused. Pay attention to what’s going on with homes in your price range, and when they sell, find out for how much.

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As usual, the Marin Independent Journal takes it to extremes, with yesterday’s headline screaming about a 5% average price decrease for the month of December.

I’ll put a stake in the ground right now. I’m figuring this year will level off in terms of transactions, minimal if any appreciation, and in general, a balanced market. What leads me to this conclusion?

1. Anecdotal evidence. There’s plenty of activityright now. We have been getting lots of showings on our listings. Well priced homes sell fast - one home in our office went out last week, well priced, and had eight offers, another one had four offers. We work in the largest office in Marin County, so we get a pretty good idea of what the market is like, and there’s plenty of activity here. Don’t kid yourself - there are plenty of buyers out there.
2. Interest rates are holding steady. They’ve climbed a bit in the last few weeks, but the 30 year fixed for a jumbo is still around 6.35%. That’s great by historical standards.

3. The numbers. What the IJ did not point out is that relative to last year, the number of closed sales in December - 226 - was nearly the same as a year ago -238, and that’s the way it has been trending. Percent in contract (24% as of January 15) still shows we’re in a slight  Buyer’s Market, and that number has barely changed in three months. We’re in a Balanced Market for Homes under $1MM, with 27% in contract.

4. History. Looking back at 40 years of pricing in Marin County real estate, and the pattern is pretty typical. A few years of rapid appreciation are usually followed by several years of no change in appreciation to slight increases. I think we’re right where we were in the early 90’s, which was the beginning of a long period of price stability.

More later from Carol Rodoni, a Bay Area real estate veteran who spoke at our office the other day and had some great insights on the market.

Here’s the numbers:

Total Homes Available:        721

Homes in Contract:            120

Percent in Contract:            24%

Under $1mm In Contract:    27%

$1MM-$2MM In Contract:    20%

$2MM-$3MM In Contract:    18%

Hottest markets are still Larkspur (33% in contract), Greenbrae (44% in contract) and Kentfield (36% in contract). These bases are small, but the trend for homes for sale in these markets have been strong for the past several months.

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The source is different than mine. I use MLS statistics, the IJ refers to DataQuick, but the stories are similar, I believe. In my summary two weeks ago, I said the market was firming up, and this story is reaffirming that.

The article notes sales volume is off 18%, but that is much better than the 30% declines we were seeing earlier this year. Additionally,average sales price is  basically unchanged.

There is also an interview about pricing with a local realtor, Candi Samuels. I share her philosophy about pricing, which is price it right, and then don’t be afraid to wait. My client is doing it with this property in Novato right now.

Time will tell if I’m right or not. But I think it’s like a big game of poker out there right now, only it’s that point in the game where it’s getting late, a couple of players are out, and the stakes are getting bigger. Buyers are looking for signs of weakness. In the housing market, there are so many price reductions that buyers now routinely expect one three weeks after the house goes on market, so no one wants to move too quickly.

Who is bluffing, and who really has the cards?

Or, as was stated so eloquently in Rounders, the terrific film about poker:

“Listen, if you can’t spot the sucker at the table in your first half hour at the table then you ARE the sucker.”

I’ll let you know who the sucker is on this one soon.

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