Is The Marin Real Estate Market Going To Collapse?

In a word, no.

Easy to say, right? And since I’m a realtor, you’re probably thinking “Of course he’s going to say that.”

Let me tell you why. I’d be happy to bend your ear in person for a long time about this, but here are three key facts - not opinions - about why Marin County real estate is about as solid a place to buy as it gets.

1. Location, location, location. The Bay Area, blessed with a mild climate, incredible natural beauty, and the city of San Francisco, continues to be a place people dream about living. And Marin is as good as it gets. It’s a relatively  easy commute to the city over the Golden Gate Bridge, or even better, across the Bay on one of the ferries. Drive 40 minutes north and you’re sipping a glass of wine on the Square in Sonoma, 60 minutes to Napa, two and half hours to Monterey, three hours to Tahoe….the list goes on and on. I made a conscious decision to move across the country to live here many years ago, and have never regretted it.

2. Zoning.Most of Marin, at least the Southern and Central portion, is built out. There’s no significant areas to build on, period. That’s because many years ago, some very forward thinking people created the master plan for the County that essentially created three key zones.

Residential zones were created along the Highway 101 corridor: Sausalito, Mill Valley, Corte Madera, Tiburon, Larkspur, Greenbrae, San Rafael, Kentfield, San Anselmo, and Fairfax.

The second major use was recreational. This is primarily the Golden Gate National Seashore, Mt. Tamalpaise State Park, Marin Municipal Water District, and then numerous other regional and state parks.

The third use, and this is the big one - was to preserve the agricultural character of West Marin. So R-60 zoning was created for much of  this area, which allows one residence every 60 acres.

The result is that over 80% of Marin County land is preserved for either recreational or agricultural use.

Now, the laws of supply and demand come into play. The supply is basically fixed. So any increase in demand at all does only one thing to prices: sends them up.

3. History. The average sales price in Marin County has increased every year for the last 40 years, except two. In 1991 and 1992, it fell 1.2% and 1.4%, respectively. Those were very difficult years for housing in California. I was just at a seminar where they pointed out average price in San Diego fell 37% from 1990-95. I’ve seen data that says Los Angeles was even worse. I have several friends who lost the whole thing in the debacle in Southern California in the 90s.

Could it happen here? Of course, anything is possible. This time, it could be different. In 1991 and 1992, there were areas where average price fell, like Corte Madera, Belvedere, and Kentfield. But other areas, like Larkspur, actually increased.

When it comes to economic trends, I believe in looking at history - not two months, but forty years is an awful  long time.

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