Marin Market Update

This chart tells a story 52 years in the making. It chronicles the history of Sales and Average Prices for all residential Marin County properties since 1966. Through 2007, prices proved to be amazingly tenacious, even during precipitous drops in sales volume. This graph gave buyers a lot of confidence that their investment would grow in value no matter how crazy the market.
That all changed in 2008 when the average price of a residential property dropped right along with sales. From 2007 to 2011, the average Marin County home lost 31% of its value, or $377,595. Here's the good news! From 2011 to the end of 2017, prices bounced back with a vengeance - increasing 61%, or $519,617. Yes we have made up the loss plus much more and now have the highest average sales price in the history of Marin County.
This graph tracks the monthly sales for the recovery years, 2011 - 2017. As stated above, 2017 mirrored 2016 until going off the rails in the 4th quarter. In October, sales were right in the middle of the pack. November was amazing with sales eclipsing the previous 6 years. We were getting excited - until December numbers came out and sales dropped to the bottom of the pile. Even with such mixed results in the 4th quarter, we only sold 5 fewer homes in 2017 compared with 2016.
Speaking of prices: the Average Price of a Marin County Detached Single Family Home increased 29%, or $359,000 from 2005 to 2017. From the depth of the recession, in 2009, Average Prices increased 61%, or $603,000. In 2016, for the first time since 2011, the Average Price decreased from the prior year but then continued it’s historical climb in 2017, adding 8.6% to the apparent value of the average home.
Inventory continues to be the fly-in-the-recovery-ointment. We ended 2017 with a near historically low Months Supply of Inventory. After rising to a barely respectable 2.7 months in February, we ate up inventory during the fall and early summer. As suspected the usual burst of sales in September combined with the questionable practice of pulling homes from the market for the holidays, left us with a mere 1 month of unsold inventory. The result of this supply/demand imbalance is increased competition for homes, manifesting in multiple offers and sales prices higher than what the properties are listed for - sometimes significantly higher. Great for sellers but tough on buyers. And, in addition to the difficulty of finding a suitable home and winning the bidding war, buyers needing financing often have to compete with all-cash buyers. If all else is equal, cash buyers are difficult to compete against. History tells us, though, that unless you plan to move again in a short time, Marin values continue to be a long-term, excellent investment.
The two graphs above are good indications of market activity. The orange bars show the number of days it takes from listing a property until it enters escrow and all contingencies are removed. You can see that days-on-market increase as we move into the 4th quarter. Even though there are fewer listings, there are even more buyers enjoying their holidays and taking a break from house hunting. The blue and red line graph shows the percentage of sales price to the original list price (red) and the list price at the time the offer is accepted (blue line). These tend to trend down during the 4th quarter, again because fewer buyers mean fewer multiple offers, resulting in lower sales prices. It is worth noting, however, that both the Days on Market and the Sales Price to List Price ratios improved dramatically in February 2017 - homes selling faster and at prices closer to list. If 2018 mirrors this trend, sellers might want to consider listing in January to take advantage of the February bump, rather than "waiting until spring."
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