On April 11, 2018

Marin Median Home Prices Hit New Highs

Consumer confidence is still soaring, and buyers continue to push aside concerns regarding recent financial market volatility, federal tax law changes affecting Bay Area homeowners, and interest rate increases, to fuel heated markets throughout Marin.

In Q1 2018, the Marin median house sales price of $1,325,000 was 10% above the Q1 2017 price of $1,200,000, and a tad above the previous peak reached in Q2 2017. The median condo sales price jumped 18% on a year-over-year basis, and was 6% higher than the recent Q4 2017 high. The market for homes under $2m is particularly feverish with days on market and months supply of inventory hitting 2 year lows in March. Prices usually increase from Q1 to Q2 as the spring selling season really gets going. It will be interesting to see what happens this year.

Marin Median Home Sales Prices by Quarter
since 2012

Median sales prices often fluctuate by quarter or season.
Longer-term trends are more meaningful than short-term changes.

Marin Median House Prices by Year
since 1990

Long-Term Home Price Trends
Bay Area vs. National Appreciation since 1987
per CoreLogic S&P Case-Shiller Home Price Index

The Case-Shiller Index does not use median sales prices to measure appreciation, but instead employs its own algorithm. This chart compares the national home price appreciation trend with that for high-price-tier houses in the 5-county SF Metro Area. The high price tier applies best to most of the markets in Central-Southern Marin, San Francisco and San Mateo.

In this chart, home prices in January 2000 are designated at a value of 100, thus the reading of 248 in December 2017 signifies a price that has appreciated 148% in the 18 years since then. Notice how similar the national and Bay Area trend lines are, with appreciable variations occurring after the 1989 earthquake, during the dotcom bubble and crash, and during the most recent Bay Area high tech boom.

As always, market dynamics often vary significantly by specific location, property type and price segment, and median prices are often affected by other factors besides changes in fair market value (such as fluctuations in luxury home and new construction sales, and in the average size of homes sold). Late reported sales may affect the median sales prices illustrated in the quarterly chart, though typically only to a minor degree.

A condensed version of our report on the ups and downs in the market over recent decades: SF Bay Area Real Estate Cycles

Marin Home Values
by City & Town

Sales Reported to MLS, 10/1/17 – 4/6/18

Below is a glance at recent house median prices and average dollar per square foot values broken out by community, for sales reported to MLS in the last 6 months or so – basically since autumn sales began to close in early October.

Median House Sales Prices

Average Dollar per Square Foot Values

Marin Median House Sizes
Square Footage by Community

Median home square footage varies markedly from town to town, and the differences in size gives important context to the differences in median prices and average dollar per square foot values. Note that median home sizes in communities with relatively low numbers of expensive and very expensive home sales – such as Belvedere and Ross in particular – can fluctuate significantly from period to period.

Marin Market Seasonality

The market has just begun what is typically the busiest selling season of the year, as new listings pour onto the market, and buyers jump on those listings.

Percentage of Listings Accepting Offers
within 30 Days (i.e. very quickly)

It is not unusual for more expensive markets to have lower percentages since higher priced homes often take longer, on average, to sell. Not only are there fewer buyers in higher price segments, but overpricing becomes a larger issue, as will be illustrated in the chart following the one below.

Home Pricing & Overpricing

For home listings under $2m, the difference between the median list price and the median sales price is quite small, less than 5%, though when looking at listings that do not sell, but expire instead, the difference swells to 13%. But for homes over that price threshold, the differences get much more striking: The median list price is almost 25% higher than the median sales price, and there is an astounding 46% difference between median sales price and the median asking price of those expensive homes that do not sell at all.

Generally speaking, sellers and listing agents in the luxury home segment are much more prone to overpricing their listings beyond what buyers are willing to contemplate paying. Even the most beautiful home has a fair market value based on a rational comparative market analysis.

The Facts Regarding Bay Area
Migration, Population & Employment Trends

Alarmist Media Reports Forecast Doom for Bay Area

Many semi-hysterical articles were published in March regarding Bay Area residents fleeing in droves, that more people are leaving than arriving, that Silicon Valley is over, and this may spell disaster for the region. Wow, that sounds very bad – but is not true: Though the rate of growth has considerably slowed from the torrid pace of recent years – which is probably a good thing, since the Bay Area is now bursting at the seams – more people are still arriving than leaving, and population and employment numbers are still increasing. Our report, Will the Last Person Leaving the Bay Area Please Turn Off the Lights covers this topic in much greater detail.

Here are 3 of the charts from our full article, based on recent U.S. census and CA state employment data.

Net domestic and foreign migration in and out of the SF Metro Area,
natural population increases and annual net population growth

The SF Bay Area population continued to increase in 2017,
though slowing from the feverish growth rates of previous years.

The Bay Area continues to be a high-paying-job-creating machine,
though hiring intermittently speeds up or slows down.

Mortgage Interest Rates

Interest rate changes are one of many factors we reviewed in a recent report Positive & Negative Factors in Bay Area Markets. It may be that fears of impending rate increases are helping to fuel the strong buyer demand we are seeing so far in 2018.

MEDIAN List Rents by County
Short-Term Trends since 2011

Additional reports can be found here: Paragon Main Reports Page

Please let us know if you have questions or we can be of assistance in any other way.

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term. Late-reported MLS activity may change certain statistics to some small degree.

© 2018 Paragon Real Estate Group

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