The Marin County Real Estate Market – November 2016 Report

The Marin County real estate market continues to see moderate price increases year over year, driven by a general lack of supply and continued high buyer demand, especially in the more affordable, middle-price ranges. The market is definitely cooler in higher price segments, with increases in the number of luxury homes for sale amid somewhat softer demand. This is a general trend across the Bay Area.

The real estate market usually goes into semi-hibernation from just before Thanksgiving through mid-January, with listing and sales activity plunging during the holiday season. However, this can still be an excellent time for buyers, because competition for listings declines rapidly.

Bay Area Median House Sales Prices by County
For 3rd Quarter 2016

Marin Median House Price Trends since 1990

Click on the map below to access median home prices by city across the Bay Area

Link to webpage on Marin Values & Trends by City

Supply, Sale & Expired Statistics
Year-over-Year Comparison

The Overall Marin House Market

Luxury Homes, $2 Million+

Months Supply of Inventory (MSI)

The MSI chart above illustrates how the general, under-$2 million home segment in Marin remains well into seller-market territory, i.e. under 3 months of inventory. The MSI readings for more expensive homes fluctuate more dramatically by season, and generally run much higher, an indication of a different supply and demand dynamic.

This MSI chart and the charts further below on percentage of listings accepting offers illustrate the seasonal nature of the Marin market: The spring selling season, March to June, is typically marked by highest buyer demand, and then comes the relatively short autumn season (mid-September to mid-November). In the mid-late summer months, July and August, the market slows down markedly, and during the mid-winter holiday season, transaction activity tends to plummet (especially in the luxury home segment). However, deals are still made at every time of the year, and as mentioned above, the slower periods can often be very good times for buyers to negotiate better deals.

Pricing Statistics

The above chart highlights an interesting situation in the market: In both the general homes market and the luxury home segment, the median list price of houses for sale is considerably higher than the median sales price of the homes actually selling. And when one looks at listings that expire without selling in the overall market, the median list price jumps up again. So there is clearly some disconnect between buyer and seller expectations.

The 2 charts below dive deeper into the pricing issue, by breaking out 1) homes that sell without going through a prior price reduction, 2) listings that sell subsequent to price reductions, and 3) listings that simply do not sell (expire). The first chart is for the general house and condo market (all price segments) and the second is specifically for luxury homes. The luxury market has always been more prone to overpricing, and in Q3 2016, for every 4 listings that sold, 3 listings expired without selling.

Overall House & Condo Market

Luxury Home Market

Homes that are priced well at the moment of hitting the market, prepared to show and marketed comprehensively, are still selling very quickly at high percentages of asking price. However, overpricing usually has significant negative ramifications, including the possibility of no sale at all.

Percentage of Listings Accepting Offers

This is another useful metric for measuring the strength of buyer demand. The first chart below tracks the percentage of listings under $2 million accepting offers by quarter, and there has been virtually no change from Q3 2015. The second chart measuring demand for luxury homes indicates year-over-year declines in all of the first 3 quarters of 2016 – not huge declines, but indications of some cooling in that end of the market.


Bay Area Case-Shiller Home Price Index
Recent price changes by property type and price segment
5-County SF Metro Area

Case-Shiller Index numbers all refer to a January 2000 price of 100, and track appreciation since then. Thus 243 on the chart signifies a price 143% above that of January 2000. For the purposes of this report, the direction of the trend lines is more important than the actual numbers.

Across the Bay Area, the pressure of demand has shifted in the past year, and that is showing up in the appreciation movements of the different price segments. The Case-Shiller Index does not measure changes in median sales prices, but has its own special algorithm to determine same-home appreciation. This short-term chart illustrates how lower-priced houses have continued to appreciate rapidly, while appreciation for mid-price houses is slowing, and the prices of more expensive houses have more or less plateaued. Condo prices have begun to decline. (The condo statistic is probably being unduly influenced by the condo market in San Francisco, where condo prices are much higher, and where a large number of new-project condos have recently been hitting the market.) The Bay Area Index for August 2016 was published in late October.

Chart: Long-Term, Case-Shiller Bay Area Home Price Trends

Link to our complete S&P Case-Shiller Index report

The two following charts are from our recent report on the Bay Area Apartment Building Market, mostly focusing on San Francisco, Marin and Alameda Counties.

Median Sales Prices for Multi-Unit Properties
by building size and submarket

Average Asking Rents by Bay Area County

Link to our full Apartment Building Market report

Statistics are generalities that can sometime fluctuate without great meaningfulness, and any one statistic may be an anomalous outlier. Longer term trends are much more reliable than short-term ups and downs.

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.

© 2016 Paragon Real Estate Group