Marin Home Sales Dramatically Up In March. Pricing Is Down Slightly. And Mortgage Rates Are Up!

It has been a tumultuous time for the national economy, but Marin County home sales in March stayed pretty strong. Actual sales for the month were up 20% vs. last March. We believe this was largely driven by a big bump in new listings, which were up 13%, and mortgage rates declining, which were almost down to 6%.

Combine this with normal seasonality – March is usually a big month for buyers from the City eager to lock in a home in a good school district  – and you have a formula for strong sales.

Of course these are last month’s numbers, before the current stock and bond market gyrations were started by the large tariff increases imposed by Trump a few weeks ago. The net result of that has been a surge in mortgage rates, with 30 year rates now suddenly around 6.8%, according to Gina Rainey of Guaranteed Rate Mortgage.

How did that happen? The quick explanation is that investors started selling off bonds dramatically last week, causing yields (interest rates) to go up. That bond market sell-off surge is actually what caused Trump to rescind tariffs for 90 days, according to many reports, as the rise in rates will increase the cost of US debt. Mortgage backed securities compete with Treasury bonds for investor capital, so when Treasury rates rise, mortgages do as well. Sorry for the Economics detour, but that is why mortgages shot up so fast.

The rise in rates is starting to affect the market as inventory is starting to build. There are now 650 homes for sale in Marin, the highest number this year, and 171, or 26% , are in contract. That is considered a buyers market. Under $1 Million , 27% of the 192 homes for sale are in contract, also a buyers market. The $1Million to $2Million range, recently the strongest, continues to be strong with 33% of the homes in contract. Over $2Million, typically the lowest, 17% of the homes are in contract.

We also ran sales since April 1 to look at pricing, and the sale to list price ratio is 101 %, so on average homes have been selling at list price. But there are pockets, as there always are. 25 Wiltshire in Larkspur, listed at $4,250,000, received nine offers and closed at  $5,300,000, all cash, an amazing $1,050,000 over list price! Mortgage rates didn’t affect that one!

In our sales meeting this morning, agents were generally optimistic. Rates are higher, but 6 to 7 % mortgages are now “the new normal.”

Sales for the month are shown below, as noted, up 20%!