The Marin Real Estate Market Report

Monthly and seasonal fluctuations in median sales prices are quite normal and do not necessarily say much about changes in fair market values. For that one must look at longer-term trends. However, for what it is worth, the Marin median house price this past February was 16% higher than in February 2015. If this spring is like the past few springs in which a high-demand/low-supply dynamic prevailed, then sustained home-price appreciation may start showing up in the statistics during the next few months.

Marin Median House Sales Prices by Month

Chart: Marin Median Price Trends since 1990

Chart: Case-Shiller Metro Area Home Price Index

We say this very preliminarily since the 2016 market has just gotten started after the holiday doldrums, but it appears that Bay Area homebuyers are generally shrugging off the recent volatility in the stock market. That doesn’t necessarily mean there will be a repeat of the overheated markets of the past few years. Much more will be known once the spring selling season really gets into full swing.

Where to Buy a Home in Marin for the Money You Want to Spend

 

Sales Prices to List Prices, Days on Market, Price Reductions & Expired Listings

This chart illustrates the strength of the market for fairly priced homes in Marin: On average, they sell very quickly for over asking price. It also shows the dangers of overpricing: the Sales Price to Original List Price percentage plunges, and average days on market soar to well over 2 months longer. And hundreds of overpriced listings do not sell at all, but simply expire and are withdrawn from the market. Contrary to common belief, most buyers will not even make offers on listings they believe to be significantly overpriced. And as the days on market increase, buyers begin to fear there must be something wrong with the home if no one else has bought it.

Mortgage Interest Rate Trends

Short-Term Changes since the Fed Raised Rates


Chart: Long-Term Interest Rate Trends

Since the Federal Reserve Bank raised the benchmark interest rate in mid-December, interest rates have actually dropped by about 8% (as of March 3), which makes a significant difference in monthly mortgage costs and loan underwriting qualification. This downward pressure on rates is generally ascribed to the dramatic volatility in the stock market since the year began. (Investors often pour money into bonds in times of stock market volatility, which then lowers the interest rate.) It is famously difficult to predict interest rate movements, which can be sudden and dramatic, but for the time being, they are getting closer to the all-time low in 2013. While it lasts, that is good news for the real estate market.

Bay Area Housing Affordability by County

Chart: Long-Term Trends in Housing Affordability

The California Association of Realtors recently released its Housing Affordability Index (HAI) for the 4th quarter of 2015, and above are 3 of 10 charts in our updated analysis. Marin is the third least affordable county in the Bay Area behind SF and San Mateo, the hearts of the high-tech boom. Per this index, 17% of Marin households could afford to purchase the median priced house. (This survey does not include condos, which would certainly increase the percentage.) San Francisco, which may have the lowest affordability rating in the country, is now 3 percentage points above its all-time low of 8%, last reached in Q3 2007. However, there has not yet occurred the convergence in extreme low affordability across Bay Area counties seen in 2007. Interest rates play a big role in affordability calculations and, as noted earlier, they have been falling in 2016.

Our full report: Bay Area Housing Affordability

Long-Term Median Price Trends

Three Selected Marin Cities

The majority of Marin towns and cities have now exceeded their previous peak values reached before the 2008 crash. If you would like information on another community not included above, please let me know.