Market Report for Marin County Real Estate: Entry Level Homes Are Hard To Find!

 Somebody Find Me A House!

Despite near-record high levels of inventory, we have a number of clients desperately trying to find the right house, and have been for months! How can that be?

The answer lies in the two biggest trends in the market right now.

First, there is very high demand for entry level homes. Anything under $750,000 is hard to find right now. An amazing 49% of these properties are under contract! Those are 2005 numbers! And it’s not just homes: 49% of condos are in contract, and 52% of single family homes.

Buyers trying to beat the deadline for the first-time home buyers tax credit (it expires November 30) are working hard to find something and close. If the credit is not extended, and they are working on that in Washington, then expect there to be a lag in demand in December and January. Investors are also jumping in, as they are able to get properties at great prices.

Second, a lot of the inventory is old. Average days on market is now at 118. Back in 2004, that number was around 60. There are plenty of houses well over 200 days on market, and many homes that have been listed two or three times in the last two years.

If you’re a buyer, it’s a little like pawing through the sales rack at Macy’s. Everything has been picked over, and what’s there isn’t quite right. The size is a bit off, or the color is wrong. Hopefully this situation will change this month, as we typically get an uptick in new listings.

And as always, there is opportunity. One of the biggest we are seeing right now is entry level homes that need work, i.e. fixers. Many entry level buyers are using FHA loans, and they often will not loan on homes that need significant work until it is done. So the house sits there. Additionally, buyers have gotten very picky, and expect everything to be done for them. Consequently, there are some great houses that need some work, but are sitting there because new home buyers won’t take them on.

Any investors interested? Give us a call!

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