Marin Home Price Appreciation Continues Even as San Francisco Market Begins to Plateau

The June 2016 Marin County Real Estate Report

Link to our updated, interactive Marin County Home Price Map

Link to our updated SF & Bay Area Home Price Maps

As illustrated in the first chart above, in recent years with the latest high-tech boom, San Francisco median home prices accelerated above those of Marin, and that does not take into account that the average Marin house size is about 20% bigger than in the city. But SF prices began to plateau this spring, while Marin houses have continued to appreciate.

People move to Marin for many quality of life reasons, but now an additional component of market pressure is that some buyers who would typically buy in San Francisco are moving the focus of their search to Marin for reasons of housing cost. Marin real estate has been among the most expensive in the country for a long time, but currently it is distinctly more affordable than in San Francisco (or San Mateo) for homes of similar quality and locations of similar affluence, as shown in the second chart. One simply gets much more home for the money in Marin.

The market in San Francisco remains strong by any reasonable measure except that of the overheated frenzy it has experienced in the last few years, but it has cooled a bit in 2016 by a number of standard measurements. Of course, it is possible this is only a temporary lull. However, if it is not, it may be an indication that other Bay Area markets may see a cooling and a transition to a more normal, less competitive market in the not too distant future.

Marin Median Home Prices since 2012

The appreciation of Marin house median prices slowed this spring, but, at $1,197,000, was still a substantial 9% increase over spring 2015. Condo median prices, at $530,000, ticked down a little, but since 2012 have actually appreciated more (78%) than houses (64%). As a point of comparison, in San Francisco, houses experienced only a 2% increase in median sales price to $1,380,000, while SF condos, which are much more expensive than in Marin, experienced a year-over-year plateauing of median price at $1,125,000.

It should be remembered that median prices are generalities that can be and often are affected by other factors besides changes in fair market value. Longer term trends are always more meaningful than shorter term.

Marin County Supply & Demand Dynamics

These two charts illustrate classic measures of the heat of the real estate market, and as shown, Marin has not seen any significant market softening per these statistics. The seasonality of the market is also clear: Spring is typically the most active selling season of the year.

Another statistic (not charted): Homes selling for under $3 million without prior price reductions, averaged a sales price about 3.5% above original list price in April and May, another indicator of strong buyer demand and competition for new listings.

Selected City Snapshots

Please contact me if you would like information on another Marin city or town.

Advice for Buyers

Buy a home that is affordable now and in the foreseeable future, keeping an appropriate reserve for the unexpected. Buying for the longer term is usually safer than for the shorter term. Lock in a low, fixed, interest rate for an extended period. Expand the list of communities you are willing to consider and do not just run after brand new listings, but look at those the market has passed by: There will often good buying opportunities with greater room to negotiate. Do not be afraid to make offers below asking price and to negotiate, but carefully review the most recent comparable sales and market indicators. During the summer and mid-winter holiday seasons, the competition for listings significantly declines, and can be excellent times to buy. Be patient: New homes come on the market every day.

Historically, homeownership in Marin has been a very good investment, because of long-term appreciation trends, the advantages of leverage, what is called the forced-savings effect (each mortgage payment including principal pay-down), and the many tax advantages. Talk to your accountant or financial planner regarding how these factors might impact you specifically. Admittedly, if one has to sell at the bottom of a down cycle, it can be painful.

Advice for Sellers

There are still plenty of motivated, qualified homebuyers in Marin, but do not take for granted that mobs of desperate buyers will show up waving over-asking offers. Price your home correctly right from the moment of going on market as overpricing can have significant negative ramifications. Prepare your home to show in its best possible light: You only have one chance to make the right impression on buyers. Hire an agent who will implement a full-court marketing plan to reach every possible prospective buyer and seize their attention. Stay up to date on comparable listings and sales, market conditions and trends, and adjust appropriately. If you receive an unacceptable offer, do not be insulted: It almost always makes more sense to issue a counter offer instead of outright rejection.

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. Statistics are generalities, longer term trends are much more meaningful than short-term, and we will always know more about what is actually going on in the present, in the future.

© 2016 Paragon Real Estate Group