Market Report Marin County
The Marin real estate market is absolutely…..normal. It is not exciting, or crazy, or dead, just …..normal.
That is a condition Marin residents just aren’t used to. After a harrowing crash in 2008-2011, and then multiple consecutive years of double-digit price increases, people just don’t remember normal. Normal means a home gets put on the market, buyers look at it, and after a few days (or even weeks) a Buyer makes an offer. Negotiation often follows, the home goes into escrow, contingencies are worked through and lifted, and it closes in 30 days, although that has sped up a bit.
There aren’t multiple offers, there aren’t traffic jams at open houses, and the home may actually sell at the listing price. Normal is not terribly exciting, but it is where we are right now.
First, inventory is good. There are 720 homes available in Marin County right now, and only 32% of them are actually in contract. That is considered a balanced market.
Things are a little stronger in the under $1 Million range. Of the 263 homes available, 44% are in contract. Technically, that is a Seller’s market. We consider between 25% and 40% of homes in contract a balanced market, with neither Sellers nor Buyers having the upper hand.
In the $1MM to $2MM range , which has been really hot, there are 253 homes available and 31% are in contract.
In the $2MM + arena, 18% of the 206 available homes are in contract. That is considered a buyers market, but this price range is typically slower moving than the market average.
So how much longer will the Marin market remain normal? Our outlook is that for the near term, we expect it to stay normal. The country has had a very long economic up cycle, and that won’t continue forever. We had an inverted yield curve for a while this summer, which is typically a predictor of recession. An inverted yield curve means that short term interest rates actually exceed long term rates, a highly atypical situation, as it means that investor’s view of long term economic prospects are bad.
Recessions are usually not good for real estate prices, and typically cause them to fall. But Marin is a little different – long term, in our analysis of average sales price in Marin, it almost never falls – even in recessions. Average sale price does level off and not increase, or it takes a very slight dip. That is what we are seeing right now. Average sale price in Marin YTD is $1,458,833, a very slight drop from the same time period a year ago, when it was $1,469,639. It will be interesting to see how it finishes for the year, and we will provide a more in depth analysis next month.
On the plus side, interest rates are still low, with another Fed rate cut last week, which is fueling the entry level market. One slightly scary scenario some economists are worried about is that typically governments fight recessions by lowering interest rates. But if they are already low, there is no room to cut, and the government options are more limited.
But for right now, things are normal, enjoy it!