Housing Price Report: Don’t Expect Rising Prices Anytime Soon
We’ve had a very long run in housing prices in Marin County, as measured by average sales price. It’s gone up for the last 14 years in a row, and nearly tripled in that time frame. Pretty astonishing, and pretty great if you owned property during that time.
This year average sales price in Marin County may actually decline. It would be the first such decline since 1992, and 1991. They didn’t fall far then, just 1.2% and 1.4%. If it declines this year, it would probably be of a similar magnitude.
So will prices start to rapidly increase again? We predict several years of price stability, not rapid increase. Here’s why.
After the decline in 1991 and 1992, average price increased, but very slowly - about 3% annually, or slightly higher than the inflation rate. And just like the period we’re in now, the prior 14 years had seen average price triple.
Marin is a very special market. It really is different, because the supply of housing is fixed. But it can not continuously rise, as housing affordability is directly related to income, employment, and the overall economy.
We don’t pretend to know when the market will turn. But we do believe that when the market stabilizes, pricing won’t come roaring back. Instead, expect it to follow the path established in the late 90s. Prices will stabilize and stay there for a while, as incomes catch up to housing prices, before other macro trends drive pricing up.
