Marin Real Estate Update

Optimism? Hope? Words we’ve gotten accustomed to using lately; can they possibly apply to the real estate market? I thought this Spring Update was going to be the most distressing update I’ve written, but I’m happy to say it isn’t so. Sadly, the bulk of the news for Marin homeowners is not pleasant, beginning with the year to year statistics, but there are some rays of light poking through the gloom.

Let’s start with the bad news, and the endless procession of newspaper articles.

IJ January 21: “Marin Home Sales Continue to Drop.” It’s true. The median price was down 19% from December of 2007. However, foreclosures at the low end had the most activity, adversely affecting the median. The big surprise? Many of those discounted sales received multiple offers. At some point people see value or else there wouldn't be more than one person trying to buy it. The bulk of the foreclosure sales in our office are going to owner-occupants as opposed to investors.

On paper, we’re back down to 2004-2005 levels. While this is alarming, the cyclical nature of real estate assumes there will be steep declines after the unrealistic run-ups we’ve seen. If you look back at the last ten years, the appreciation we’ve experienced has been exceptional. Where it hits hard, of course, is for all those people who bought 2-3 years ago. Is there a positive side? From the IJ: “Although people who bought property at the peak of the market may not be feeling too good, if you bought with the intention of living there for a while, you're going to be fine." Looking around us, that’s hard to believe, but I do agree.

The current market's silver lining is for the first time in many years, Marin is creating a good, affordable first-time homebuyer market. I don't think we've hit bottom, but I think we're coasting at a relatively realistic pace. And from the perspective of many first-time buyers and investors, things have only been getting better for months. It's hard to imagine entry level resale activity getting much stronger, especially if the deep discounts fade as a result of the government’s new efforts to stem foreclosures and stabilize prices.

The recently signed stimulus act could, however, provide a positive pull for buyers on the fence. In addition to the first-time homebuyer tax credit of up to $8,000, increasing jumbo conforming loan limits to $729,750 as part of the stimulus act could have local benefits. What was becoming a drag on the mid-level pricing of homes in Marin was the change back in December 2008 when limits for such loans were reduced from $729,000 to $625,000. The new limit helps homebuyers secure a loan without tapping into more of their savings for a down payment.

Final IJ headline, 3/19: Marin home prices drop another 26 percent in February “Marin home prices were down more than 20 percent in February from levels a year ago as deep discounts and a lack of high-end sales continued to be hallmarks of the Bay Area market.”

One segment of the market that hadn’t seen much decline was the $1,000,000 and above. That’s beginning to change, but is reflected more in the number of sales at the high end than actual price.

Distressed sales are starting to creep to southern parts of the county as more luxury homes and residents who took on a lot of home and a lot of debt are caught in the economic bind, but the decline is reflected more in the number of sales at the high end than actual price. Still, we can expect to see an increase of luxury homes in the foreclosure market in the next six months. But with today's haphazard buying patterns, it doesn't mean the typical house in the Bay Area has lost that much value. In normal times, median price is more of a storyteller, but these aren't normal times……

Those yearend sales figures? Dismal, yes, but are they anywhere near those 20-30% numbers the headlines trumpet? No. For the year, the Average Sales Price on all residential properties was down 13%. How is that possible? It takes into account the first nine months of the year, when prices actually inched up or stayed level. When you average it out over 12 months, the yearly decline was 13%. Though this is not as bad as you might have expected, remember this: it is the worst year on record in 40 years of keeping records. 13 times worse. Bad, very bad, but not the 35-50% we’ve seen in parts of the central valley and southern California. Once again, Marin County is as solid as you can get is troubled times. One final wrinkle. In past updates I’ve talked about how the county numbers do not reflect the individual cities. That 13% is more like 30% in Novato, yet within Novato that 30% is unfairly weighted towards condos. Once again, every town is different; every neighborhood is different. And, as always, the further south you are, the less slippage there is.

Those rays of light in the gloom? I cannot believe how many buyers are out and about; Serious buyers, mostly young, first-timers. My open houses are getting bombarded. Buyers are seeing the values, especially when coupled with the extraordinary interest rates. Multiple offers are more commonplace, people are getting pre-approved in advance.

Are we at the bottom? I don’t think so, price-wise, but I also believe interest rates will not remain so low. As the market stabilizes, there is upward pressure on rates. If you have to choose between a better rate and a better price, take the better rate. It’s a huge difference in interest paid over time. If you know anyone considering buying, have them give me a call. I would hate to see them miss

Eduardo Gutekunst is a Marin County Real Estate agent and works for Frank Howard Allen Realtors, the top Real Estate Company in the area and a county fixture for nearly 100 years. Eduardo is about as native to Marin County as one can be, having first moved to the county from San Francisco when he was two years old. He has lived in Marin County all his life, and is familiar with its history and its communities ever since he was a child here in the 50’s. There’s hardly a nook or a cranny he isn’t familiar with, and he has walked or biked through most of its parks and open land. If you’re looking to buy or sell real estate, or you’d like to find out just about anything about Marin, give Eduardo a call. He’s available any day of the week. Try him at Frank Howard Allen’s San Rafael office, 415-258-4115, or give him a ring on his cell phone 415-939-2308.



Home About Marin Home Search Buyers Sellers Mortage Calculator County Information Community Services Schools Map of Marin Testimonials About Eduardo Contact Me	Marin Real Estate Update Optimism? Hope? Words we’ve gotten accustomed to using lately; can they possibly apply to the real estate market? I thought this Spring Update was going to be the most distressing update I’ve written, but I’m happy to say it isn’t so. Sadly, the bulk of the news for Marin homeowners is not pleasant, beginning with the year to year statistics, but there are some rays of light poking through the gloom. Let’s start with the bad news, and the endless procession of newspaper articles. IJ January 21: “Marin Home Sales Continue to Drop.” It’s true. The median price was down 19% from December of 2007. However, foreclosures at the low end had the most activity, adversely affecting the median. The big surprise? Many of those discounted sales received multiple offers. At some point people see value or else there wouldn't be more than one person trying to buy it. The bulk of the foreclosure sales in our office are going to owner-occupants as opposed to investors. On paper, we’re back down to 2004-2005 levels. While this is alarming, the cyclical nature of real estate assumes there will be steep declines after the unrealistic run-ups we’ve seen. If you look back at the last ten years, the appreciation we’ve experienced has been exceptional. Where it hits hard, of course, is for all those people who bought 2-3 years ago. Is there a positive side? From the IJ: “Although people who bought property at the peak of the market may not be feeling too good, if you bought with the intention of living there for a while, you're going to be fine." Looking around us, that’s hard to believe, but I do agree. The current market's silver lining is for the first time in many years, Marin is creating a good, affordable first-time homebuyer market. I don't think we've hit bottom, but I think we're coasting at a relatively realistic pace. And from the perspective of many first-time buyers and investors, things have only been getting better for months. It's hard to imagine entry level resale activity getting much stronger, especially if the deep discounts fade as a result of the government’s new efforts to stem foreclosures and stabilize prices. The recently signed stimulus act could, however, provide a positive pull for buyers on the fence. In addition to the first-time homebuyer tax credit of up to $8,000, increasing jumbo conforming loan limits to $729,750 as part of the stimulus act could have local benefits. What was becoming a drag on the mid-level pricing of homes in Marin was the change back in December 2008 when limits for such loans were reduced from $729,000 to $625,000. The new limit helps homebuyers secure a loan without tapping into more of their savings for a down payment. Final IJ headline, 3/19: Marin home prices drop another 26 percent in February “Marin home prices were down more than 20 percent in February from levels a year ago as deep discounts and a lack of high-end sales continued to be hallmarks of the Bay Area market.” One segment of the market that hadn’t seen much decline was the $1,000,000 and above. That’s beginning to change, but is reflected more in the number of sales at the high end than actual price. Distressed sales are starting to creep to southern parts of the county as more luxury homes and residents who took on a lot of home and a lot of debt are caught in the economic bind, but the decline is reflected more in the number of sales at the high end than actual price. Still, we can expect to see an increase of luxury homes in the foreclosure market in the next six months. But with today's haphazard buying patterns, it doesn't mean the typical house in the Bay Area has lost that much value. In normal times, median price is more of a storyteller, but these aren't normal times…… Those yearend sales figures? Dismal, yes, but are they anywhere near those 20-30% numbers the headlines trumpet? No. For the year, the Average Sales Price on all residential properties was down 13%. How is that possible? It takes into account the first nine months of the year, when prices actually inched up or stayed level. When you average it out over 12 months, the yearly decline was 13%. Though this is not as bad as you might have expected, remember this: it is the worst year on record in 40 years of keeping records. 13 times worse. Bad, very bad, but not the 35-50% we’ve seen in parts of the central valley and southern California. Once again, Marin County is as solid as you can get is troubled times. One final wrinkle. In past updates I’ve talked about how the county numbers do not reflect the individual cities. That 13% is more like 30% in Novato, yet within Novato that 30% is unfairly weighted towards condos. Once again, every town is different; every neighborhood is different. And, as always, the further south you are, the less slippage there is. Those rays of light in the gloom? I cannot believe how many buyers are out and about; Serious buyers, mostly young, first-timers. My open houses are getting bombarded. Buyers are seeing the values, especially when coupled with the extraordinary interest rates. Multiple offers are more commonplace, people are getting pre-approved in advance. Are we at the bottom? I don’t think so, price-wise, but I also believe interest rates will not remain so low. As the market stabilizes, there is upward pressure on rates. If you have to choose between a better rate and a better price, take the better rate. It’s a huge difference in interest paid over time. If you know anyone considering buying, have them give me a call. I would hate to see them miss Eduardo Gutekunst is a Marin County Real Estate agent and works for Frank Howard Allen Realtors, the top Real Estate Company in the area and a county fixture for nearly 100 years. Eduardo is about as native to Marin County as one can be, having first moved to the county from San Francisco when he was two years old. He has lived in Marin County all his life, and is familiar with its history and its communities ever since he was a child here in the 50’s. There’s hardly a nook or a cranny he isn’t familiar with, and he has walked or biked through most of its parks and open land. If you’re looking to buy or sell real estate, or you’d like to find out just about anything about Marin, give Eduardo a call. He’s available any day of the week. Try him at Frank Howard Allen’s San Rafael office, 415-258-4115, or give him a ring on his cell phone 415-939-2308.