Mark your calendar for Saturday, July 18th. That’s the date for the annual Larkspur Wine Stroll along Magnolia Avenue. You can buy tickets on the street at the event, and then taste your way through town. Several local and area vintners will be pouring. Stop by our office, next to the Lark Theatre, for some delicious wines and cheese and to say hello!
If you are trying to buy a home in Marin, you no doubt already know that all good things (like wine) take time, but take heart. Inventory is building as we approach the full Spring market, although still more slowly than most buyers and their agents would like.
We are still in a Sellers’ market. There are now only 636 homes for sale throughout Marin, and 46% of those homes are already in contract. A big part of what is going on is that homes are getting snapped up very quickly, so even though homes are coming on the market, they aren’t around very long. Cash buyers will often close in 14 days or less, and a number of lenders are now promoting 25 day closes, even with a jumbo mortgage. That kind of speed was unheard of a few years ago from the banks.
And it shows in the market. For sold homes in the last 30 days, the median number of days on market is 31. That is an amazing number. It means that half sold in more than 31 days, but half sold in less!
Most homes coming on now in the strongest areas are looking at offers about a week after coming on market. They go through one brokers open, one Sunday open, give people a day or two to think about it, and then let buyers submit. Its a pretty good strategy in this market, one that we often employ for our listings.
The under $750,000 segment is hottest, with 55% of homes in contract. The move up market, $750,000 to $2,000,000, is now at 46% in contract. And luxury homes, over $2,000,000, are still strong with 30% under contract.
Pricing, in general, continues its upward march, although a little more slowly than what we saw last year. But the homes most in demand are still getting lots and lots of attention. Last week 424 William, a small, older home on a 5600 square foot lot in Larkspur in largely original condition, priced at $695,000, issued 39 disclosure packets! They received 12 offers, most likely going to an all cash buyer. That type of activity is unusual, but indicative of the extent to which buyers will go to get into the right home.
STRATEGIES FOR BUYERS
We help buyers adjust and adapt to changing conditions. For example, we have recently made a major change in how we counsel buyers about backup offers. In the past, we have typically advised buyers not to get into what is called backup position. That means you did not get the house, usually because you offered less, but your contract will be ratified for backup. If the primary buyer falls out, your contract automatically becomes live.
We have avoided it before because as a listing agent, we use backup offers as a stick to keep the primary buyer performing, usually pretty successfully. “Uh, yes, Mr. Buyer, you want how much for that deck repair? Well, just so you know the backup buyer has already signed off on it! If you have changed your mind and don’t want the house, we can go back to them?”
But different times call for different tactics, and if offered, we now advise buyers to take the backup position. Part of it is because it is so difficult to get a contract accepted right now. But there has been a real phenomenon which has surfaced in this market: the occasional whopping good case of buyers’ remorse!
It works like this: The buyer finds out their offer was accepted, even though there were 12 others. Joy! Elation! Champagne! We have a house!
Then occasionally, they wake up the next day, look themselves in the mirror and say, “I just paid more than 24 other people offered for this house? I won? Am I crazy? Get me out now!”
And just like that, the backup offer becomes live. So do it if you get the chance. It’s a long shot, but you never know.
If you hate the multiple-offer circus, be sure to watch your inbox not just for new listings, but for price reductions. If a change in price puts a home in your range, you may be in luck. We think you will be seeing more of these coming soon. There is some extremely aggressive pricing out there right now, and even in this market, buyers look at comps and won’t just pay anything for a home. If the home sits on the market, buyers lose interest, and then the seller often has to reduce.
When the home hits the real market value (sometimes on the first reduction, sometimes not), a savvy buyer has the chance to purchase the home by moving quickly and buying it in a non-competitive situation. Much less stressful than waiting for a phone call at 10 pm to see if your offer, one of several, is even being considered for a counter offer. And that’s where we get back to that nice glass of wine, a good night’s sleep, and another new listing or two tomorrow!
We have a new listing near downtown Larkspur that will not be on MLS.
It’s a three bedroom, two and one half bath mid century contemporary with high ceilings, a great room that opens to a sunny deck for entertaining, a large family room downstairs, two car garage, nice hardwood floors, eat in kitchen, large windows, great floor plan and one of the best locations anywhere, just three blocks or so off Magnolia. Price is $1.3m. For a private showing, or for more information, call Bob at 415-378-1414. Will post pictures soon!
With only 452 homes for sale right now, and with 42% of those already in contract, Marin is squarely in Sellers’ Market country. Homes under $750,000 are tough to find, and 56% of them are already in contract. The move up market, $750,000 to $2,000,000, is a little easier with 40% in contract. Over $2MM, only 22% are in contract.
The quarterly sales report from Coldwell Banker shows that Marin’s inventory shortage is actually less serious than some nearby markets.
The Peninsula is crazy, as the author notes, “One Menlo Park home priced at $1,395,000 received 28 offers.” And this: “Entry-level inventory in areas close to downtown Mountain View is almost zero.” Mountain View, by the way, is a town of 78,000 people, nearly twice the size of San Rafael.
And from San Francisco: “The number of available homes is down significantly from this time last year, which was already too low. “With the pressure to find homes there so intense, it isn’t surprising that the overflow spreads northward to Marin. Tech companies are responding to the demand and trying to make it easier for workers to live in Marin. Apple now has four buses a day from Marin to the Cupertino campus, as does Google. Both leave from the Park and Ride at the Buckeye Roadhouse in Mill Valley. According to one of our friends, it makes the commute “totally doable”, as the buses have Wi-Fi, are extremely comfortable, and totally geared for productivity.
We’re not quite sure whether sellers are just getting a slow start this year, or if something fundamental has changed, but the shortage of homes for sale in Marin is hanging on like a stubborn cold. If you are one of those sellers on the fence, this should read as some seriously good news. The law of supply and demand puts you in the driver seat. Prices have rallied to the point where some of us are wondering how long it can last. But as long as tech is booming in San Francisco, we expect the migration to Marin continue, as young families realize the difficulties and expense of raising children in the city.
If you’re a buyer, there are some strategies that can help. Some over priced listings that have been sitting on market may be more than ready to welcome a realistic offer. There are also some things you can do, other than increasing the price, to make your bid look more attractive. We’ll update this market report every couple of weeks now that Spring is coming. Hopefully things will loosen up a bit soon.
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We find ourselves in what is typically the slowest time of the year with the phones ringing more than usual. It’s a pretty even mix of buyers and sellers, which always helps to create a balanced and nicely flowing market.
Market activity in Marin County remains fairly strong. Good homes that are well priced are still moving quickly everywhere, albeit at a somewhat slower speed than past Summer and Fall.
As of earlier this month, inventory is average, with 662 homes available for sale in Marin. And 41%, or 277 of them, are already in contract. And the mid-level price range is the hottest. For homes from $750,000 to $1,500,000, 47% are in contract. Under $750,000, 41% are in contract. And for homes over $1,500,000, 26% are in contract. Lots of crazy high prices these days. The $4 to $6 million house is almost a norm.
The California Association of Realtors predicts the median home price to increase 5.2% next year in the state, less than this year. More homes will become available as Sellers realize rising prices make it possible and desirable to sell. Many have been waiting for a reason to get off the fence. More supply will slow down price increases.
We expect a similar trend in Marin. We expect continued appreciation, but not at the rates we have seen for the last 18 months. That pent up demand, some of it going all the way back to the bank crash of 2008, has tapered off. Leading economists predict only a slight rise in mortgage rates, to 4.5% for a 30 year fixed mortgage. Marin typically runs higher than state average (don’t we in everything?) so rates for the County could be higher.
Recent stock market flip flops, civil unrest and inter national concerns have made everyone a little more cautious. But tech in SF is booming. Demand for Marin from young couples — usually when expecting a baby or shortly after having one — will remain the steady migration it has long been. And it’s a one way migration, too. We have never known anyone to move back to the city. One you get to Marin, you know there is no better place to be.
Have an amazing 2015. Let us know if we can help.
Pat & Bob Ravasio
All stats from Bareis MLS. BROKER is Coldwell Banker, Larkspur. CalBRE#01394550. Find us on Facebook @ Bob & Pat Ravasio’s real estate page.
The early bird often catches the worm in Marin County’s real estate market. Every year about this time, we can almost feel the pent up buyer demand. Qualified buyers who worked hard last year — maybe even writing one or more offers on properties, only to be outbid — are coming back soon.
These buyers will be more determined than ever, and smart sellers looking for a competitive edge will be ready for them.
Traditionally, the opening of the Spring real estate market in Marin County is the Monday after the Superbowl. Why this is we are really not sure, but the Superbowl has become the grand finale of the holiday season and the start of a new real estate market.
Smart sellers get their real estate agents on board early, before their repairs and staging are even started. Why? Because the sooner you hire us, the more work we can and will do for you. Our commitment to property preparation has grown over the years. Today, we have an excellent team of contractors to do the work, and we can also provide sellers with experienced project coordinators who manage the entire process, start to finish.
On our first visit, we discuss with the seller all the things we do to help sell properties for top dollar, and then look around to determine what maintenance, repair and upgrade projects are most worth doing. A budget is established. Fresh paint, landscaping, floor refinishing and new fixtures are often at the top of the “worthwhile” list. Working within our client’s budget, we then estimate and coordinate subcontractor schedules for desired improvements and staging. Our project managers then supervise every detail to make sure the work is done professionally, quickly and economically.
Because we use many of the same contractors regularly, and have a good working relationship with them, we know them to be reliable, and they tend to give us a great value and excellent service.
By prepping homes with fresh finishes, new fixtures, and other relatively inexpensive upgrades, we can create the best possible first impression as we bring them to market. Our sellers agree this is an excellent investment to make in your home.
If you are a home fix-up whiz and would like to be considered as a project manager on our team, please contact Pat at 415-845-1927. If you are a seller looking for a competitive edge in the upcoming Spring market, call Bob at 415-378-1414.
One of the hardest problems for a buyer to overcome is moving up. How do you successfully sell your current home, get the funds, and then turn around and buy something new, all when inventory is so tight? It can be quite a daunting maneuver.
One idea to consider is a lease option. A lease option will reverse that process. Basically you find the new property, lock it in with an option, move in, then sell your current home. We are in the middle of a deal right now like that, and so far, everyone is happy.
Here is how it works in Marin County. The Buyer puts an offer in on the new home, with an option agreement. The option agreement requires funds be put down, usually 5% of the sale price, and given directly to the Seller. The funds are non-refundable, but applicable to the purchase price of the home. At the same time, the Buyer also executes a lease agreement to move into the home and pay rent to the Seller. Once in the new home, the Buyer sells their current home, then uses the proceeds to close on the new property.
For example, let’s say the Buyer finds a willing Seller at $1,000,000, with a lease price of $5000 a month. The Buyer puts down $50,000, which goes directly to Seller. They move in at $5000 a month; often a portion of the rent may also be applicable to the purchase. They then sell their home for $700,000, and use the funds to complete the purchase (which is now only $950,000, because the option payment has been deducted from the sale price.)
There are risks, of course, as the Buyer may get less for their home than anticipated. It also requires a Seller who is willing to wait a little while for their proceeds. But occasionally the stars line up and it can work for everyone involved.