Marin Real Estate Looking Back on 2018

There were almost too many local, national and international political, economic, social and ecological factors impacting the 2018 market to count. In the first half of the year, market conditions were very hot, and there were strong year-over-year appreciation rates. Come summer/early autumn, real estate and financial markets began to shift distinctly cooler. Looking at 2019, there are many wild cards whose impacts are difficult to predict: extremely volatile financial markets, fluctuating interest rates, contentious national politics, international trade issues, spiraling debt levels, employment growth – and a dramatic surge of local high-tech unicorns that plan to go public, which could create a tsunami of new wealth in the Bay Area.

Annual Median Home Price Appreciation

On a year over year basis, the Marin annual median house sales price increased by 7.6% or $95,000, to $1,345,000 in 2018.

Quarterly Home Price Appreciation

The most recent, significant increase in median house sales price occurred in the 2nd quarter of 2018. It then dropped by $100,000 in the second half of the year. However, it is not uncommon for median sales prices to jump in Q2 during the spring selling season, and then drop or plateau in the year’s subsequent quarters. The question is where it will go in the next 2 quarters considering some of the market cooling indicators seen around the Bay Area this past autumn.

Quarterly Year-over-Year Appreciation Rates

The year-over-year appreciation rate in Q4 2017 was a very high 12%. The rate then proceeded to step down quarter by quarter to 3% in Q4 2018. This dynamic of a hot market cooling in the second half of the year was relatively common around the Bay Area.

Market Overviews

Median Home Prices by Bedroom Count

Blank fields indicate that the number of sales was too low to generate a reliable median price.

Selected Market Indicators

Some of the standard market statistics are relatively stable, while others – such as the increasing numbers of price reductions and expired listings – are more indicative of a slowing market. Real estate sales are fiercely seasonal, and midwinter is the slowest time of the year, with by far the lowest number of sales. Our next significant, statistical indications of market direction will probably come in early spring.

Median Sales Price Changes by City & Town

In recent years, all around the Bay Area, median price increases have been most substantial in the more affordable communities within each market. In the most expensive areas, median prices have often plateaued or even ticked down since 2015. But tracking appreciation in the most expensive towns – with relatively few sales and a very wide range of sales prices – is much more challenging than in larger, less expensive markets.

30+ Years of Bay Area Real Estate Cycles

The CoreLogic S&P Case-Shiller high-price-tier Home Price Index for the 5- county San Francisco Metro Area, illustrated above by the blue line, applies best to more expensive Bay Area housing markets such as most of San Francisco, Marin, San Mateo and Diablo Valley/Lamorinda. The SF Metro low- and mid-price tiers had much more dramatic bubbles and crashes in 2005-2011, but as of December 2017, have ended up at points a bit higher than the high-price tier. The green line tracks home price appreciation for the United States as a whole. The Case-Shiller Index is predicated on a January 2000 price of 100. “250” signifies a price that has appreciated 150% since January 2000.

Financial-market cycles have been around for hundreds of years, from the 1600’s Dutch tulip mania through our recent speculative frenzy in crypto-currencies. Though cycles vary in their details, their causes, effects and trend lines are often similar, providing more context as to how the market works over time.

Human beings have always been worried about (or terrified of) the future, and going back many thousands of years, we have constantly attempted to predict what it holds. However, 2018 © Compass whether using priests, oracles, astrologers, economists, analysts or media pundits, we show no aptitude as a species for having the ability to do so with any accuracy. In 2012, a NobelPrize-winning economist, famous for housing market analysis, said that the U.S. real estate market might not recover “in our lifetimes.” In hindsight, we now know that the recovery had already begun in some markets such as San Francisco. In 2015, during a period of financial market fluctuations and a slowdown in our local high-tech boom, a very well-respected Bay Area economist predicted that there would soon be “blood in the streets of San Francisco.” But then housing and stock markets soared higher and the high-tech boom dramatically strengthened again. (He has since postponed the arrival of blood until 1919 or 1920.)

Our smartest experts can’t get it right, much less the thousands of glib, confident forecasts by utterly unqualified individuals reported on in the media every month. We can’t even remember the mistakes of the recent past – one reason why we don’t seem to be able to escape the curse of recurring cycles – much less foretell what’s going to happen tomorrow. Which leads to the next point.

It is extremely difficult to predict when different parts of a cycle will begin or end. There is no rule regarding how long the different parts of a market cycle will last. Boom times, even periods of “irrational exuberance,” can go on much longer than expected, or get second winds, with huge jumps in values. On the other hand, negative shocks can appear with startling suddenness out of nowhere, often triggered by unexpected economic or political events that hammer confidence, adversely affect a wide variety of market dominos, and then balloon into periods of decline and stagnation. These negative adjustments can be in the nature of a bubble popping, the slow deflation of a punctured tire, or some combination of the two.

Going back many decades, all the major Bay Area recessions have been tied to national or international economic crises. Considering the fundamental strengths of the local economy, absent a major natural disaster, it is unlikely that a major downturn would occur due simply to local issues. However, local issues can exacerbate a cycle: The 1989 earthquake intensified the effects of the national recession in the early 1990’s; our greater exposure to dotcom businesses produced a spike up and down with the NASDAQ bubble & 2000-2001 crash; and our current, raging high-tech boom has poured fuel on our up-cycle during the current recovery.

All bubbles are ultimately based on irrational exuberance, runaway greed, criminal behavior, or all three mashed up together. Whether exemplified by junk bonds, stock market hysteria, gorging on debt, a corporate Ponzi-scheme mentality, an abandonment of reasonable risk assessment, and/or incomprehensible and dishonest financial engineering, the bubble is relentlessly pumped bigger and tighter.

However, it should be noted that the 2008 crash was abnormal in its scale, and much greater than other downturns going back to the Great Depression. The 2005-2007 bubble was fueled by home buying and refinancing with exorbitant, unaffordable levels of debt, promoted by predatory lending practices such as deceptive teaser rates, no-down-payment loans and an abysmal decline in underwriting standards. The market adjustments of the early 1990’s and early-2000’s saw declines in Bay Area home values in the range of 10% to 11%, as compared to the terrible 2008 – 2011 declines of 20% to 60%. (Bay Area prices are now above their 2007 peaks.)

Whatever the phase of the cycle, many people think it will last forever. Going up: “The world is different now, profits don’t matter, and there’s no reason why the upward trend can’t continue indefinitely.” And when the market turns: “Homeownership has always been a terrible investment and the market will not recover for decades.” But the economy mends, the population grows, people start families, inflation accumulates over the years, and the repressed demand of those who want to own their own homes builds up. In the early eighties, mid-nineties and in 2012, after about 4 years of a recessionary housing market, this repressed demand jumped back in – or “exploded” might be a better description – and home prices started to rise again. Then kept rising as consumer confidence returned; ultimately moving into over-confidence and irrational exuberance. The nature of cycles is to keep turning.

As long as one doesn’t have to sell during a down cycle, Bay Area homeownership has almost always been a good or even spectacular investment (though admittedly if one does have to sell at the bottom of the market, the results can be painful). This is due to the ability to finance one’s purchase (and refinance when rates drop), certain tax benefits, the gradual pay-off of the mortgage (the “forced savings” effect), inflation, and long-term demographic and appreciation trends.

The best way to overcome cycles is to buy a home for the longer term, one whose monthly cost is readily affordable for you now, ideally using a long-term, fixed-rate loan, while keeping an adequate financial reserve for emergencies – and then resisting the urge to use your home as an ATM during times of significant appreciation. If one keeps to those rules, then it usually true, quoting a NYT editorial, “Renting can make sense as a lifestyle choice… As a means to building wealth, however, there is no practical substitute for homeownership.”

Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. All opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.

Mixed Signals in the Marin County Real Estate Market

Autumn markets in counties around the Bay Area have seen significant shifts, but with wide variance in the magnitude of these changes between counties. So far, Marin itself has seen much less dramatic changes than some other local markets such as Santa Clara and Sonoma Counties.

Homes that sell have generally continued to sell quickly, many after receiving multiple offers. Median sales prices are considerably higher on a year-over-year basis, and luxury house sales were higher in October 2018 than in October 2017. However, listing inventory has climbed, the percentage of sales receiving multiple offers has declined, and the numbers of price reductions and expired listings are increasing.

Many standard statistics are lagging indicators and take time to reflect any changes on the ground. They will bear watching in coming months.

Median Value Trends
from Different Angles

Year-over-year changes comparing relatively short periods of time – 3 months in the chart below – should be taken with a grain of salt. Still, appreciation rates around the Bay Area have been well above inflation rates, though they appear to be slowing since spring. It is not unusual for median sales prices, and indeed most real estate statistics, to fluctuate by month or by season.

Supply & Demand Statistics
Some changes- but the sky is not falling.

Year over year, the number of active listings on the market was considerably up from 2017 and 2016, but similar to 2015 and 2014, and below 2013. So, a distinct change from the last two years, but certainly not outside the bounds of normal listing inventory since the recovery began in 2012.

Generally speaking, sales volumes dropped 18% in the Bay Area in September, and dropped 9% in Marin. But Marin home sales in October were actually a bit higher than in October 2017 (though a bit lower than in October 2016).

October 2018 saw by far the highest number of price reductions in 6 years, up 89% year over year. However, some other local counties saw y-o-y increases over 350%. This is an important indicator of changing market conditions, especially if it continues.

Competitive bidding declined in September-October 2018, compared to both the hot spring 2018 selling season, and to September-October of last year. Buyer competition (and overbidding) for new listings is a major driver of home price appreciation. However, the recent percentages, though down over the past year, would still be considered very high from a historical perspective.

The average sales price to original list price percentage was down from spring, as is typical, but, at 99% (i.e. 1% below asking price) about the same as the October percentages in the previous 3 years.

The number of listings expired and withdrawn from the market (without selling) ticked up in October, but the change was much less dramatic than in most other Bay Area Counties – Santa Clara saw a 208% increase. November is typically the biggest month of the year in Marin for listings being pulled off the market for the mid-winter holiday slowdown. We will see if there are substantial further increases in November and/or December of homes that sellers have not been able to sell at the prices they currently consider acceptable. One indicator of a changing market is a growing disconnect between buyer and seller expectations.

So far, those listings selling this autumn have generally sold relatively quickly. But this statistic is a lagging indicator and won’t reflect properties that have not yet sold, perhaps after necessary price reductions. If the market is in the midst of a sustained transition, future months may see significant adjustments in this metric.

Luxury Home Sales

Year over year, the sale of homes of $2.5 million and above was down in August, flat in September and then way up – 58% – in October. However, compared to 2 years ago, October’s sales were basically flat.

Appreciation Trends in Selected Cities & Towns

The following are seasonally adjusted, smoothed charts of estimated median house values. They are not based on MLS sales data, and their calculations can vary from MLS median sales price data – though the trend lines are typically very similar.

The selected communities below are listed in alphabetical order. If you want information on a town not included below, please let us know.

The Multi-Unit Residential Property Markets of San Francisco, Alameda & Marin Counties

The big political issue facing the market is CA Prop 10, which, if passed in November, repeals the limits on local rent control laws enacted in the Costa-Hawkins Rental Housing Act. This would almost certainly have negative ramifications for owners of multi-unit residential properties in San Francisco and Oakland. The CA Legislative Analyst Office does a good job summarizing the issues: Prop 10 Review. Prop 10 is currently creating something of a shadow on the larger apartment building market, with some buyers waiting for election results – much as happened with SF Prop G did in 2014. (Prop G failed and the market rallied dramatically after Election Day.) However, the market certainly did not grind to a halt in Q3, nor did values plunge.

Historically speaking, it has been difficult for rent control measures to pass on a statewide basis, because homeowners, all of whom are potential landlords, outnumber tenants in California. On this issue, people tend to vote their financial interests, and homeowners generally vote in higher percentages than tenants. Strong rent-control measures are generally found only in tenant-majority communities. All of which is not to take for granted what will occur on November 6.

This report generally separates out the 2-4 unit and the 5+ unit apartment building markets, since they have different dynamics and values. All the statistics herein are broad generalities covering a wide variety of buildings of very different location, age, size, quality, condition, tenant profile, income and income potential. The number of sales in many of the segments is relatively small, which can make the statistics more prone to anomalous fluctuations.

Some charts pertain to multiple counties, and others drill down on statistics specific to San Francisco; some track the last 12 months of sales, and others have a final data point reflecting 2018 YTD sales. All numbers should be considered good-faith, general approximations.

Trends in Residential Rents

This chart below tracks longer-term average asking rent trends, instead of median asking rent appreciation since 2012, as illustrated in the charts above. It provides a bit more historical context.

Sales, Prices & Market Trends

2-4 Unit Buildings

5+ Unit Buildings: Inventory, Sales & Values

The inventory of active listings ticked up in the last 2 quarters.

SF 5+ Unit Buildings: Trends in Gross Rent Multiple,
Cap Rate & Dollar per Unit Value

Many of the standard value parameters have remained remarkably
consistent in San Francisco over recent years.

San Francisco New Construction Pipeline

Almost 70,000 housing units are now in the SF new construction pipeline. Plans are constantly being added, revised and abandoned, and new housing construction is extremely sensitive to changes in economic conditions.

Q3 2018 Sales of San Francisco 5+ Unit
Apartment Buildings

San Francisco is a unique residential-investment market: the buildings are smaller and older than in most places, built in a wide range of architectural styles. The great majority of the market is under rent control, which makes upside rental-income potential a big component of valuation, even if it is unknown when that potential might be realized. Within the city the variety in buildings and units is enormous.

In real estate, the devil is always in the details: If you are interested in further insight into the details of any of the above sales, or regarding properties currently on the market, please contact me.

Broker Performance in
Residential Multi-Unit Property Sales

In the summer of 2018, Paragon and Pacific Union merged into Compass to create the largest residential investment property brokerage in San Francisco.

It is impossible to know how median and average value statistics apply to any particular apartment building without a specific, tailored, comparative market analysis. Statistics are generalities: This is especially true for multi-unit properties, with the enormous range of property types, sizes, conditions, circumstances, qualities, financial data and locations. We are often dependent upon listing agents for income and expense details, which can be of varying accuracy. A percentage of investment property sales are not reported to MLS, which sometimes limits our ability for more comprehensive data analysis.

Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. All opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.

© 2018 Compass

CoreLogic S&P Case-Shiller Home Price Index Update

The CoreLogic S&P Case-Shiller Home Price Index does not evaluate median sales price changes, but employs its own proprietary algorithm to measure home price appreciation over time. Since its indices cover large areas – for example, the San Francisco Metro Area is comprised of 5 counties – which themselves contain communities and neighborhoods of widely varying home values, the C-S chart numbers do not refer to specific prices, but instead reflect prices as compared to those prevailing in January 2000, designated as having a value of 100. Thus a reading of 250 signifies that home prices have appreciated 150% above the price of January 2000 (with its reading of 100).

Case-Shiller divides all the house sales in the SF metro area into thirds, or tiers. Thus the third of sales with the lowest prices is the low-price tier; the third of sales with the highest sales prices is the high-price tier; and the third in between is the mid-price tier. The price ranges of these tiers changes as the market changes. The 3 tiers experienced dramatically different bubbles, crashes and recoveries over the past 18 years, to a large degree determined by how badly the tier was affected by the subprime financing crisis. The low price tier was worst affected – huge bubble, huge crash, most dramatic recovery – and the high-price least affected (but still deeply affected).

Most of the house sales in expensive counties such as San Francisco, Marin and San Mateo, as well as affluent communities in other Bay Area counties are in the “high price tier”, and that is where we focus most of our attention. In fact, much of the house market in San Francisco and other very expensive markets would qualify for an “ultra-highprice
tier,” but C-S does not break that out. All counties, to some degree, have sales in all 3 price tiers.

The Index is published 2 months after each month delineated – the July index was released in late September – and reflects a 3-month rolling average, so in effect, it is looking into a rear-view mirror at the market 3 to 5 months ago.

The 5 counties in our Case-Shiller Metro Statistical Area are San Francisco, Marin, San Mateo, Alameda and Contra Costa: Alameda and Contra Costa are by far the largest markets; SF itself comprises only about 7% of house sales in the metro area. We believe the Index generally applies to the other Bay Area counties as well. There are many dozens, if not hundreds, of unique real estate markets found in such a broad region, with different dynamics, moving at varying speeds, sometimes even moving in different directions. How the C-S Index applies to any particular property is impossible to say without a specific comparative market analysis.

More information: https://us.spindices.com/index-family/real-estate/sp-corelogic-case-shiller

S&P Dow Jones Indices LLC, S&P/Case-Shiller U.S. National Home Price Index [CSUSHPINSA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CSUSHPINSA, September 25, 2018.

Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. All opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.

Marin County Real Estate Market Report

While we wait for the autumn selling season to begin in September, this report will take a look at Marin and Bay Area market trends from a variety of angles, starting with home prices.

Paragon & Compass Merge

We are pleased to announce that Paragon Real Estate has joined forces with Compass in order to deliver a new level of support and service for our clients. Founded in 2012, Compass is a real estate technology company now operating in 30 regions with over 90 offices across the United States, including New York City, San Francisco, Los Angeles, Chicago, Boston, Seattle, Washington D.C., Dallas and Miami. With the merger, the Compass Bay Area team consists of more than 500 agents closing more than $4.5 billion in annual sales volume.

Bay Area Housing Affordability

The California Association of Realtors (CAR) just released its Q2 report on housing affordability, which we have illustrated in the 3 charts below. (For some reason, CAR calculates the Q2 Marin median house sales price at a little less than our MLS analysis, but the difference is not material.)

The Luxury Home Market

Spring 2018 was a strong market for high-end homes in Marin, though as is typically the case, it was not as hot as the market for more affordable homes. These dynamics were consistent across the Bay Area.

Bay Area Sales by County

In total sales volume, Marin has the fourth largest luxury home market in the Bay Area, but if population is taken into account, it has the largest proportionally: Both SF and San Mateo have about 3 times the Marin population, while Santa Clara has 7 times more residents.

Luxury Market Seasonality

As illustrated by the next 3 charts, the Marin luxury market is fiercely seasonal. Typically, there is a large burst of new listings in September, which fuels the relatively short autumn selling season. In mid-November, market activity plunges, and the expensive home market does not pick up again until early spring.

Trends in Market Dynamics
Time on Market to Acceptance of Offer

As the market get hotter, listings sell faster.

Sales Price to List Price Percentage

As the market get more competitive, overbidding increases.

General Market Seasonality

Market activity climbs steeply from the beginning of the year to peak in spring, slows in midsummer, spikes back up in autumn, and then plunges for the mid-winter holidays.

Months Supply of Inventory (MSI)

The stronger the buyer demand as compared to the supply of listings available to purchase, the lower the MSI. Generally speaking, MSI figures around the Bay Area have been flirting with historic lows in 2018.

Percentage of Listings Accepting Offers

As the buyer demand increases, higher percentages
of listings go into contract within the quarter.

Price Reductions

Sellers reduce prices most often at two times of the year: At the end of spring and early summer as they try to sell unsold listings before the summer slowdown, and then at the end of autumn before the market dives into its winter doldrums. It is an effort to grab the attention of buyers anew before or during periods of reduced demand.

Mortgage Interest Rates
Short-Term and Long-Term Trends

Two of the factors that have worried market analysts have been the big changes in federal tax law limiting the deductibility of state and local taxes, and interest rate expenses – changes that affect more affluent, higher home cost areas like ours most dramatically – and increasing interest rates. So far in 2018, buyers appear to have shrugged off any such concerns, and dollar-appreciation rates have generally accelerated since the beginning of the year.

Interest rates play a big role in housing affordability, and their drop after the 2008 crash played a vital part in the market recovery of the past 6 years. It has typically been very difficult to predict interest rate changes with any accuracy, though most economists believe they are headed higher. The questions being: If so, how high? And how will buyers react?

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.

Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. All opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.

© 2018 Compass

Marin Home Prices, Market Conditions & Trends

This report contains Annual Median Home Price Appreciation Rates, Market Values by City, Bedroom Count and Price Segment in addition to Luxury Home Sales & Where Best to Look in Your Price Range. Enjoy this Mid-Year 2018 Report.

Marin, SF, CA & U.S.
Median Home Price Trends

Annual Median Sales Price Changes
by Dollar and by Percentage

Appreciation is typically viewed through the lens of percentage changes, but looking at dollar-value increases is another angle that is sometimes more interesting. Below are charts measuring appreciation by both parameters.

Comparing the first half of 2018 to 2017, the Marin median house sales price increased by an astounding $135,000. However, it is not a given that the second half of the year will see home price appreciation at similar rates: Prices could indeed increase further, or they might plateau or even tick down instead. For the last 7 years, spring has typically been the most feverish selling season of the year and has often powered most of the appreciation occurring over the full year.

Median sales price is that price at which half the sales occurred for more and half for less, and it is often affected by other factors besides changes in fair market value, such as changes in inventory or in luxury home sales. Sometimes median sales prices in a particular community fluctuate without great meaningfulness. This is especially true in smaller towns with relatively few sales and wide ranges of sales prices. A specific comparative market analysis of a particular property is sometimes the only way to gauge appreciation trends.

Home Value Appreciation by City

Median Sales Prices
2011 through Mid-2018

Average Dollar per Square Foot Values
2012 through Mid-2018, Selected Cities

Home Sales & Prices by City & Bedroom Count

Reflecting 12 Months Sales through Mid-2018

There are also tables available for Marin 2-bedroom and 6-bedroom house sales, and for 3-bedroom condo sales, which we are happy to provide upon request.

Where Best to Look in Your Price Range
Home Sales by City & Price Segment

Luxury Home Sales by City

City Sales Breakdowns

Moving north from the Golden Gate Bridge
to the Sonoma County border

Coastal and western Marin communities are small with relatively few home sales in any 12 month period, but we can provide more information on their sales and prices upon request.

Additional reports can be found here: Paragon Main Reports Page

Please let us know if you have questions
or if we can be of assistance in any other way.

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term. Late-reported MLS activity may change certain statistics to some small degree.

© 2018 Paragon Real Estate Group

Marin County Market Prices & Trends

Before diving into prices and trends in individual city markets in this month’s report, these four charts are overviews for Marin County market. In April 2018, the median house sales price hit a new peak price, slightly above the previous high achieved in May of 2017. Since median home sales prices often hit their annual high points in May – illustrated by the gold columns in the first chart – we may well see another increase before spring is over.

Marin Market Dynamics by City

Though we tend to speak of the real estate market as a single reality, in fact, market size and dynamics vary considerably by community and price segment. As further context to the analyses below, here are links to 2 charts from our April report illustrating home prices and price per square foot values by city: Median Sales Prices & Average Dollar per Square Foot Values

Remember that value statistics can be affected by other factors besides changes in fair market value, such as seasonality, changes in the luxury or new-construction markets, or fluctuations in inventory available to purchase.

Though not yet reflected in the chart below, median sales prices have continued to increase in 2018.

Many more market analyses can be found further down this web page and via these links:

Paragon Main Reports Page
Marin County Home Price Trends by City
Marin County Demographics
Positive & Negative Factors in Bay Area Markets
Survey of Bay Area Real Estate Markets
Article: 30+ Years of SF Bay Area Real Estate Cycles

These analyses were made in good faith with data from sources deemed reliable, but they may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions.

© 2018 Paragon Real Estate Group

Marin Market Report: What City’s Median Home Price Appreciated by $1 Million since 2011?

Before diving into prices and trends in individual city markets, these three charts are overviews for Marin County. In April 2018, the median house sales price hit a new peak price, slightly above the previous high achieved in May of 2017. Since median prices often hit their annual high points in May – illustrated by the gold columns in the first chart – we may see another increase before spring is over.

Marin Market Dynamics by City

Though we tend to speak of the real estate market as a single reality, in fact, market size and dynamics vary considerably by community and price segment. As further context to the analyses below, here are links to 2 charts from our April report illustrating median prices and price per square foot values by city:

Median House Sales Prices by City
Average Dollar per Square Foot Values

Remember that these general statistics can be affected by other factors besides changes in fair market value, such as seasonality, changes in the luxury or new-construction markets, or simply significant fluctuations in the inventory available to purchase.

Overbidding percentages have typically – but not always – been higher in more affordable home markets.

Many of the statistics in the next 2 charts would be considered incredibly low – indicating feverish markets – by any historical measure.

Additional reading can be found here:

Paragon Main Reports Page
Marin County Demographics
Sonoma County Market Report
Positive & Negative Factors in Bay Area Markets
Survey of Bay Area Real Estate Markets
30+ Years of SF Bay Area Real Estate Cycles

Please let us know if you have questions or if we can be of assistance in any other way.

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term. Late-reported MLS activity may change certain statistics to some small degree.

© 2018 Paragon Real Estate Group

Marin Median Home Prices Hit New Highs

Consumer confidence is still soaring, and buyers continue to push aside concerns regarding recent financial market volatility, federal tax law changes affecting Bay Area homeowners, and interest rate increases, to fuel heated markets throughout Marin.

In Q1 2018, the Marin median house sales price of $1,325,000 was 10% above the Q1 2017 price of $1,200,000, and a tad above the previous peak reached in Q2 2017. The median condo sales price jumped 18% on a year-over-year basis, and was 6% higher than the recent Q4 2017 high. The market for homes under $2m is particularly feverish with days on market and months supply of inventory hitting 2 year lows in March. Prices usually increase from Q1 to Q2 as the spring selling season really gets going. It will be interesting to see what happens this year.

Marin Median Home Sales Prices by Quarter
since 2012

Median sales prices often fluctuate by quarter or season.
Longer-term trends are more meaningful than short-term changes.

Marin Median House Prices by Year
since 1990

Long-Term Home Price Trends
Bay Area vs. National Appreciation since 1987
per CoreLogic S&P Case-Shiller Home Price Index

The Case-Shiller Index does not use median sales prices to measure appreciation, but instead employs its own algorithm. This chart compares the national home price appreciation trend with that for high-price-tier houses in the 5-county SF Metro Area. The high price tier applies best to most of the markets in Central-Southern Marin, San Francisco and San Mateo.

In this chart, home prices in January 2000 are designated at a value of 100, thus the reading of 248 in December 2017 signifies a price that has appreciated 148% in the 18 years since then. Notice how similar the national and Bay Area trend lines are, with appreciable variations occurring after the 1989 earthquake, during the dotcom bubble and crash, and during the most recent Bay Area high tech boom.

As always, market dynamics often vary significantly by specific location, property type and price segment, and median prices are often affected by other factors besides changes in fair market value (such as fluctuations in luxury home and new construction sales, and in the average size of homes sold). Late reported sales may affect the median sales prices illustrated in the quarterly chart, though typically only to a minor degree.

A condensed version of our report on the ups and downs in the market over recent decades: SF Bay Area Real Estate Cycles

Marin Home Values
by City & Town

Sales Reported to MLS, 10/1/17 – 4/6/18

Below is a glance at recent house median prices and average dollar per square foot values broken out by community, for sales reported to MLS in the last 6 months or so – basically since autumn sales began to close in early October.

Median House Sales Prices

Average Dollar per Square Foot Values

Marin Median House Sizes
Square Footage by Community

Median home square footage varies markedly from town to town, and the differences in size gives important context to the differences in median prices and average dollar per square foot values. Note that median home sizes in communities with relatively low numbers of expensive and very expensive home sales – such as Belvedere and Ross in particular – can fluctuate significantly from period to period.

Marin Market Seasonality

The market has just begun what is typically the busiest selling season of the year, as new listings pour onto the market, and buyers jump on those listings.

Percentage of Listings Accepting Offers
within 30 Days (i.e. very quickly)

It is not unusual for more expensive markets to have lower percentages since higher priced homes often take longer, on average, to sell. Not only are there fewer buyers in higher price segments, but overpricing becomes a larger issue, as will be illustrated in the chart following the one below.

Home Pricing & Overpricing

For home listings under $2m, the difference between the median list price and the median sales price is quite small, less than 5%, though when looking at listings that do not sell, but expire instead, the difference swells to 13%. But for homes over that price threshold, the differences get much more striking: The median list price is almost 25% higher than the median sales price, and there is an astounding 46% difference between median sales price and the median asking price of those expensive homes that do not sell at all.

Generally speaking, sellers and listing agents in the luxury home segment are much more prone to overpricing their listings beyond what buyers are willing to contemplate paying. Even the most beautiful home has a fair market value based on a rational comparative market analysis.

The Facts Regarding Bay Area
Migration, Population & Employment Trends

Alarmist Media Reports Forecast Doom for Bay Area

Many semi-hysterical articles were published in March regarding Bay Area residents fleeing in droves, that more people are leaving than arriving, that Silicon Valley is over, and this may spell disaster for the region. Wow, that sounds very bad – but is not true: Though the rate of growth has considerably slowed from the torrid pace of recent years – which is probably a good thing, since the Bay Area is now bursting at the seams – more people are still arriving than leaving, and population and employment numbers are still increasing. Our report, Will the Last Person Leaving the Bay Area Please Turn Off the Lights covers this topic in much greater detail.

Here are 3 of the charts from our full article, based on recent U.S. census and CA state employment data.

Net domestic and foreign migration in and out of the SF Metro Area,
natural population increases and annual net population growth

The SF Bay Area population continued to increase in 2017,
though slowing from the feverish growth rates of previous years.

The Bay Area continues to be a high-paying-job-creating machine,
though hiring intermittently speeds up or slows down.

Mortgage Interest Rates

Interest rate changes are one of many factors we reviewed in a recent report Positive & Negative Factors in Bay Area Markets. It may be that fears of impending rate increases are helping to fuel the strong buyer demand we are seeing so far in 2018.

MEDIAN List Rents by County
Short-Term Trends since 2011

Additional reports can be found here: Paragon Main Reports Page

Please let us know if you have questions or we can be of assistance in any other way.

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term. Late-reported MLS activity may change certain statistics to some small degree.

© 2018 Paragon Real Estate Group