The Marin County real estate market bustles with frenzied activity as buyers compete for a limited supply of available homes. What's going on here?
Many potential sellers still seem to be under the impression that it is not a good time to place their homes on the market, and are postponing their plans to relocate, downsize, or move up. It is true that prices are not what they were in 2006---but they are a far cry from the lows of 2009! Seller reluctance has resulted in the following statistics (believed accurate, but not guaranteed) as of July 31.
There were 223 single family residences (SFR) and 53 condominiums (Condo's) sold in July in Marin County. In 2011, it was 172, and 49, and in 2010, it was 166 and 41. Inventory of available homes in July was 563 SFR's and 105 Condo's. The previous year,the numbers were 1034 and 386, and in July of 2010, there were 1290 SFR's and 381 Condo's available for purchase. A client recently made an offer on a home that was newly-listed, went significantly over asking price, was one of 11 offers, and was not in the top half. So, Sellers may want to re-evaluate the quality of this market as it relates to their goals. Admittedly, prices are not what they were a few years ago, but the market is active, interest rates are at historical lows, and well-marketed, well-priced properties are selling quickly, and often for over asking price. The ratio of sale price to list price in Marin at the end of July was .989% for SFR's and 1.005% (meaning they actually went over asking price, on average) for Condo's. New listings continue to lag, with only 223 SFR's and 53 Condo's listed during the month of July, they barely kept up with the number of units sold. Months Supply of Inventory (MSI) in the County continues to drop, with a 2.5 MSI of SFR's and a 2.0 MSI of Condo's as of July 31. This compares to 6.0 and 7.9 in July of 2011, and 6.0 and 9.3 in July of 2010!
San Diego, California-based DataQuick, a real estate news service, in an article dated August 15, and captioned "Bay Area Home Sales and Prices Continue Upward Trend". Noted that home sales in the Bay Area rose on a year-over-year basis in July for the 13th continuous month. The article stated that the Bay Area market is "re-balancing slowly" from "low-end bargain chasing" to "increasing activity in the mid and move-up markets". The article went on to note that absentee buyers (mostly investors) purchased 22.6% of Bay Area homes in July, and that all-cash buyers accounted for 27.3% of Bay Area sales during the month, up 26% from a year ago. The article also mentioned that jumbo loans (over $417K) represented 38.5% of July's "purchase lending", the highest since December of 2007, when it was 38.6%.
The increase in jumbo loan availability and use is fueling the demand for mid-range and higher homes. Loan guidelines have eased, and mortgage money is available for qualified buyers. Strict appraisal standards are holding prices to more rational levels compared to the go-go days of a few years ago, but many homes still garner multiple offers and go significantly over asking price.
Buyers need not be discouraged. Following the advice of a good, persistent REALTOR, it is still entirely possible to find the home of your dreams. But sales happen fast, especially on attractive listings, so the home that comes on the market on Wednesday or Thursday may already be in contract before the open home on Sunday. It is a better idea to go see it now! Ask your agent about pre-emptive offers. And don't be afraid to put your best foot forward!