Hello Everyone,
City-by-City Report out this week. The only big surprise is Sausalito, roused from its somnolent state and sizzling at 40.28% in contract, now solidly in sellers’ market territory and up from where it languished as a buyers’ market for an extended period. Percentage in contract at last report was 28%. Remains to be seen if it is finally catching fire or if the sizzle will fizzle. Time will tell.
Market action reports for October show inventory for both single family residences (SFR) and Condo’s down substantially from last year’s levels. SFR’s, with only a 4.6 month supply of inventory (MSI), down 45% from Oct. of 2010. Condo MSI down 51% from the same time last year. Inventory continuing to tighten. Reluctant sellers, waiting for market values to recover, hold on to their property unless required to sell by some compelling circumstance. Basic economics teaches us that reduced supply eventually results in increasing prices which then attract a greater supply. Here in Marin County, this has yet to happen, with inventory continuing to go from low to lower. Attractive, well-priced, well-located properties often selling almost immediately, often with multiple offers, and frequently at a premium to list price. Most multiple-offer situations still not going wildly over list price because tight appraisal guidelines continue to hold prices in check, however cash buyers are obviously free to spend any amount they care to and often come out on the winning end of bidding contests, particularly in the lower end of the market. One agent was recently overheard telling clients that if they liked a particular newly-listed property, they should make an offer right away as it probably would not be around next week. The agent was right, it wasn’t. These are not hard-sell tactics--- this is just the reality of today’sMarinCountyreal estate market. There is a large pool of frustrated buyers ready to pounce on prime properties. Buyers in the higher price points may have the luxury of shopping around, but should take advantage of the opportunity while the party lasts! The only thing we know for sure is that everything changes.
Single Family Residences (SFR)
Percentage in contract up for most pricing segments. Overall percentage in contract up slightly from 29.6% to 30.2% since last report. Still an overall buyers’ market, but first impressions prove deceptive when we take a closer look. Homes under $1million up another point, finally breaking the 40% barrier- a solid sellers’ market. $1million to $1.99 million range down just slightly but basically even at 18.3% in contract---continuing to be a strong buyers’ market and representing a great opportunity. $2 million to $2.99 million price point offering similar or even slightly better opportunity for buyers, at only 16.05% in contract, while the over $3million segment, at only 4.6% in contract offers enormous opportunities for those with buying and bargaining power. SFR unit sales at 1556 on Nov. 1, compared to 1499 at the same time last year, or up 3.8%. Prices are down a bit to an average of $1,008,371 compared to $1,033,918 on the same date last year.
Condominiums
Condo percentage in contract increased slightly overall, with 45.51%, of listed units in contract on October 25—just on the verge of becoming a strong sellers’ market. The under $1million condo market already there, at 46.54% in contract. YTD condo units sold at 449, up 14% from the 386 units sold last year at the same time. Average sold price for condo’s also down to $369,368 vs. last year’s $399,432. Average days on market were 147 vs 132 last year. Decreases in sales prices for Condo’s and SFR’s not entirely attributable to market price attrition. Many analysts assign about 50% of decline in average sales price to changes in market mix and other factors.
Holiday Season once again almost upon us. Many Buyers and Sellers traditionally take a break from real estate during this time. Could be a mistake for both sides as sellers can benefit from buyers who are still in the market and tend to be much more motivated, and buyers also benefit when the competition takes a break.
Bottom line: Interest rates are great; prices are low; people are buying homes!
More next time.
Until then, best wishes to all,
Fred
p.s. for access to spreadsheets please see my website
http://www.fredanlyan.com
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