Hello Everyone,
"More Bay Area homes sold last month but the pace was still well below average as the market remained plagued by uncertainty – over the future of home prices, jobs, the economy and the nation’s political future. The median price paid for a home dropped below the year-ago level for the 11th consecutive month as distressed property sales claimed around half of the resale market" according to a September 16 article by La Jolla, CA-based DataQuick, a real estate news service. This pretty much sums up what we have been saying recently about our local Marin County real estate market. Buyers afraid to make long-term commitments when they don't know if they will have jobs or if their newly-purchased homes will maintain their value. Article goes on to state "Looking ahead, we'll be watching the mortgage default filings closely, given their surge last month from July. If that continues this fall, it could mean a lot more distressed properties on the market next year, which would put downward pressure on prices." Full text of article available at:
http://dqnews.com/Articles/2011/News/California/Bay-Area/RRBay110916.aspx
Here in Marin County, year-to-date (YTD) real estate sales vs. 2010 are up in units but down in price.
Single Family Residences (SFR)
Approximately 47% of Main County SFR's sold YTD represented some type of distressed sale, resulting in continued price restraint. Unit sales as of September 13 were 1339 units, vs. 1290 at the same time last year, an increase of 3.8%. Average sold price, however, fell from $1,042,985 to $1,001,269. As we have noted previously, please keep in mind that we estimate at least half that price decline is attributable to market mix rather than price decline.
Condominiums
Condo's told a similar story. Approximately 61% of YTD Marin County condo sales were distressed. Condo unit sales as of September 13 were 384 units vs. 340 at the same time in 2010, an increase of 13%. Condo prices were down too, with the average sold price at $371,429 vs. the year-ago figure of $404,630.
While it may be true, as the DataQuick article suggests, that there is more downside risk in this market, it appears that if we are not at the bottom of the market, we are certainly near it. Population will continue to increase, there is a limited supply of Bay Area housing, and Marin County has very little room to build more. In real estate, as in the stock market, just about everyone agrees it is extremely difficult to identify the absolute bottom of a market. Usually what happens is that by the time people realize that the market has turned positive again, significant gains have already been made. So the question becomes whether or not any money lost on a small post-purchase price decline would be less than the extra money paid by delaying the purchase until prices are already on their way back up. At that point, more properties will be receiving multiple offers and competition with other buyers will be driving prices up--- probably not the way they went up in 2006-2007, but significantly, nonetheless. In addition, mortgage rates will probably increase due to an increased demand for funds. Is it better to buy now, with less competition, lower price, lower rate mortgage--- or wait until everyone else decides to jump in the market? A $500,000 mortgage with an increase of 1% in the lending rate would add on about $416 to the monthly payment. As we have said before, buying Marin County real estate now seems like a no-brainer. The DataQuick article notes that, in August, 21.3% of homes sold in the County were purchased by "absentee buyers-mostly investors", up from 17.8% a year ago. Do they know something the rest of us don't?
More next time.
Until then, best wishes to all,
Fred
p.s. for access to spreadsheets please see:
http://www.fredanlyan.com
Sunday, September 18, 2011
Monday, September 5, 2011
The Anlyan Report. Marin County Real Estate 9.4.11
Hello Everyone,
The summer seemed to pass us by really quickly, and here we are-- already at the end of another Labor Day Weekend!
City-by-City analysis, out this week shows 6 of 13 listed cities and towns' percentage in contract up, and 7 down, most of them only incremental. Three notable exceptions to this are:
1. Belvedere, with 29 homes on the market as of 9/4, and none of them in contract 2.Mill Valley, where inventory decreased from 173 last month, to 159, and percentage in contract increased from 24.86% to 29.56% 3. Novato, with a decrease from 334 to 313 listed housing units and percentage in contract increasing from 38% to 43.45%.
Overall, housing inventory very low for this time of year, compared to prior years. Results in a lot of activity for attractive, well-priced new listings, which are often gone in the first 1 or 2 weeks, not infrequently with multiple offers. Most of them not going far over listing price, but a few are. Proper pricing still a major key to success, as overpriced homes tend to sit on the market while buyers wait for prices to get into line with reality. Many buyers making offers substantially below listing price, hoping to negotiate something in between their offer and the advertised price. Many of them successful!
Single Family Residences (SFR) inventory, at 710 units (CB Market action report. Figures do not include properties in-contract, accounting for the difference between this number and the SFR and Condo reports, which do include those properties). To put this in perspective, in August of 2010, there were 1,237 SFR units listed, and in August of '09, 1,212. In December of '10, the low point for the year, there were 753 SFR units on MLS. In Dec. of '09, it was 809, and in '08, it was 805. On 8/30, the months' supply of inventory (MSI) for SFR's (CB MarketQuest) was 4.3, less than half of last August's 9 month supply. In the County, 1264 SFR units sold YTD as of 8/30, compared to 1222 at the same time last year, a 3.7% increase, so even with less inventory from which to choose, buyers somehow managed to find and purchase more property this year than last. Judging from the number of open escrows we are seeing, we are looking for that trend to continue through the fall. The big question is-- when will sellers start to turn the supply of homes back on??
Condominiums following a pattern similar to SFR's. Inventory severely constrained, with only 247 units available (CB Market Action Report) as of 8/30. Compares to 381 last August, and 344 in Aug of '09. The December figures for the last 3 years are: Dec, 2010----291; Dec 2009-- 260'; and Dec 2008----287. YTD condo units sold as of 8/30 were 358, up 11.5% from last August's 321. MSI for condo's as of 8/30 (CB MarketQuest) was 4.3, again less than half of last August's 10 month supply!
There seems to be a lot of pent-up buyer demand in the market. Normally, this would result in higher prices which, in turn, would pull more inventory into the market. Strict underwriting and appraisal standards are holding this in check to a large extent, so sellers are giving the contracts to the "gold plated" buyers--- the ones they think have the best chance of closing escrow. All-cash buyers, or those with a major portion of the purchase price in cash have a very significant advantage in this market, especially in sales involving new listings. Homes priced above $2million (mostly SFR's) declined to 9.86% in contract from last month's 17.72%. Previous 3 months had been in the 13% to 16% range. Unclear if this is a trend, but looks like a further opportunity for high-end buyers. Individuals thinking about moving up to larger homes would do well to focus more attention on the huge potential savings on a new upper-end home purchase as it will more than likely significantly outweigh any potential loss on the sale of the lower-priced current home. When opportunity knocks-------!
More next time.
Best wishes to all for a happy, healthy, and prosperous autumn season,
Fred
p.s. for access to spreadsheets, please see my website http://www.fredanlyan.com
The summer seemed to pass us by really quickly, and here we are-- already at the end of another Labor Day Weekend!
City-by-City analysis, out this week shows 6 of 13 listed cities and towns' percentage in contract up, and 7 down, most of them only incremental. Three notable exceptions to this are:
1. Belvedere, with 29 homes on the market as of 9/4, and none of them in contract 2.Mill Valley, where inventory decreased from 173 last month, to 159, and percentage in contract increased from 24.86% to 29.56% 3. Novato, with a decrease from 334 to 313 listed housing units and percentage in contract increasing from 38% to 43.45%.
Overall, housing inventory very low for this time of year, compared to prior years. Results in a lot of activity for attractive, well-priced new listings, which are often gone in the first 1 or 2 weeks, not infrequently with multiple offers. Most of them not going far over listing price, but a few are. Proper pricing still a major key to success, as overpriced homes tend to sit on the market while buyers wait for prices to get into line with reality. Many buyers making offers substantially below listing price, hoping to negotiate something in between their offer and the advertised price. Many of them successful!
Single Family Residences (SFR) inventory, at 710 units (CB Market action report. Figures do not include properties in-contract, accounting for the difference between this number and the SFR and Condo reports, which do include those properties). To put this in perspective, in August of 2010, there were 1,237 SFR units listed, and in August of '09, 1,212. In December of '10, the low point for the year, there were 753 SFR units on MLS. In Dec. of '09, it was 809, and in '08, it was 805. On 8/30, the months' supply of inventory (MSI) for SFR's (CB MarketQuest) was 4.3, less than half of last August's 9 month supply. In the County, 1264 SFR units sold YTD as of 8/30, compared to 1222 at the same time last year, a 3.7% increase, so even with less inventory from which to choose, buyers somehow managed to find and purchase more property this year than last. Judging from the number of open escrows we are seeing, we are looking for that trend to continue through the fall. The big question is-- when will sellers start to turn the supply of homes back on??
Condominiums following a pattern similar to SFR's. Inventory severely constrained, with only 247 units available (CB Market Action Report) as of 8/30. Compares to 381 last August, and 344 in Aug of '09. The December figures for the last 3 years are: Dec, 2010----291; Dec 2009-- 260'; and Dec 2008----287. YTD condo units sold as of 8/30 were 358, up 11.5% from last August's 321. MSI for condo's as of 8/30 (CB MarketQuest) was 4.3, again less than half of last August's 10 month supply!
There seems to be a lot of pent-up buyer demand in the market. Normally, this would result in higher prices which, in turn, would pull more inventory into the market. Strict underwriting and appraisal standards are holding this in check to a large extent, so sellers are giving the contracts to the "gold plated" buyers--- the ones they think have the best chance of closing escrow. All-cash buyers, or those with a major portion of the purchase price in cash have a very significant advantage in this market, especially in sales involving new listings. Homes priced above $2million (mostly SFR's) declined to 9.86% in contract from last month's 17.72%. Previous 3 months had been in the 13% to 16% range. Unclear if this is a trend, but looks like a further opportunity for high-end buyers. Individuals thinking about moving up to larger homes would do well to focus more attention on the huge potential savings on a new upper-end home purchase as it will more than likely significantly outweigh any potential loss on the sale of the lower-priced current home. When opportunity knocks-------!
More next time.
Best wishes to all for a happy, healthy, and prosperous autumn season,
Fred
p.s. for access to spreadsheets, please see my website http://www.fredanlyan.com
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