Kyle Frazier, J.D., Broker Associate Ι Pacific Union International | Christies International Real Estate | (415) 350-9440

Marin County, California, Luxury Homes Report (March 2009–Sales and Inventory Analysis)

Marin County, California, Luxury Homes Report (March 2009–Sales and Inventory Analysis)   While sluggishness has trickled-up into the luxury real estate market in Marin, CA., there is legitimate cause for optimism in coming months. For example, there were 161 new escrows opened in Marin County in February 2009. While the majority of these (68%) were value plays in Novato and San Rafael, it was the highest level seen since August 2008 and was 19% higher than February 2008–encouraging news since we had just 19 “working days” last month. Moreover, the first 2 weeks of March 2009, resulted in 116 opened escrows. In March 2008, we saw just 98 homes go into escrow. That is an increase of 18% over last year. Again, encouraging. For a detailed accounting of national trends, click here for the March 2009 Market Report from Institute for Luxury Home Marketing. Note, if you would like a local report relating to any town or zip code in Marin or San Francisco, e-mail me. 

It is clear to me that with minimal social proof, buyers will return to the market and pent-up demand will create a surge in sales figures. The $8,000 no-strings-attached credit from the government (for first time home buyers, loosely defined as someone who has not owned a home for the past 3 years and meets income limitations), the increased conforming loan limit (set to go back up to $729,750 some time in April 2009), and a pronounced level of increased affordability across the board is a recipe for sales. I should also note that with the increased conforming loan amount, buyers with 25% down (and who otherwise qualify) will be able to obtain top-shelf financing for purchases of a little over $1.6 million. While that is not “Luxury” territory here in Marin, many potential move-up buyers of luxury homes must sell their homes first and this will be a big step in the right direction. And interest rates are a full 1-point lower today than they were this time last year. Certainly, the pump is primed.

As noted above, we are seeing greater activity so far this year as the number of homes in escrow has increased and buyer enthusiasm is improved. Open houses have been extremely busy in all price bands with 30-50 groups being reported for new listings in desirable locales. Offers are being written. And our agents are noting a more focused approach by buyers. We are also starting to see buyers lose out on properties they love because they figured there was no urgency in writing an offer. 

Because people constantly inquire about the infiltration of foreclosed homes (a.k.a. REO’s) and short sales in the higher end, just a few quick notes: While 42.9% of Marin home sales in January and February 2009 were distressed, the phenomenon has not appreciably gathered traction in the luxury segment. The numbers of foreclosures and REO’s in Southern Marin is definitely on the rise though. For example, Sausalito has 19 homes in some stage of foreclosure and Tiburon has 28 homes. Yet these towns only have 8 homes that are actually bank owned. Finally, while we seem to hear a lot about distressed homes, less than 1% of Marin homes are considered “distressed.”    

The graph below reflects a 90-day rolling average of asking prices for homes in the topmost quartile (e.g. prices of the most expensive homes) in 3 touchstone Marin County cities: Tiburon, Mill Valley, and Kentfield. As you can see, over the past year, prices have declined in each. Note however, that a few homes in Kentfield marketed early last year were priced at the extreme high end, resulting in an exaggerated shift.

Real Estate Market Chart by Altos Research www.altosresearch.com
$2 Million to $4 Million Luxury Homes

As we enter into the historically biggest selling season (Spring), inventory has climbed to 110 homes on the market between $2 million and $4 million (up from 69 last month). Since the emergence of the “new economy” post October 2008, sales numbers in this price band are down. For example, there were 18 sales in October 2008 (a traditionally strong time of year for sales and, of course, these buyers were well into their escrow periods at the time of the meltdown). In February 2009, we recorded just 2 sales. Note that one of the sales was a $4.5 million listing that sold for $4 million in Mill Valley (a Morgan Lane listing, I may add). Other than that sale, Tiburon was the only other city with a closed escrow in this price band. These homes averaged 102 days on market. Their average sales price was $3.05 million (roughly $930 per square foot), with an average of 3,648 square feet. Meanwhile, we have a fairly impressive number of homes currently in escrow. Belvedere and Tiburon have 4 and 2 homes, respectively, currently in escrow. Ross, Kentfield, and San Anselmo each have one home in escrow. 

$4 Million & Up Ultra-Luxury Homes
The inventory level in Marin County’s ultra-luxury market (homes priced in the $4 million and up range) rose over 20% from last month to 39 homes for sale. Most homes in this price band are located in Tiburon, Belvedere, Sausalito, and Ross. Other cities / towns with homes priced over $4 million include Kentfield, Mill Valley, and San Rafael. As reported above, last month we had a home sell for $4 million in Mill Valley (the home was sited on a large sunny parcel with glorious pool and landscaping–4 Beds, 4.5 Baths, office, home theater, and possessed a profound sense of “wow”–sales price per square foot was approximately $870). Other than that, there have been no sales in the past 3 months, which, despite the state of things, seems surprising. Generally, we would expect 2 sales per month, even during the slow season. On a positive note, we do have 4 homes in escrow — all four are located in Tiburon and Belvedere.  

 

Marin Cities & Towns

$2 Million — $4 Million

$4 Million & Up

Active

Pending

Active

Pending

Sausalito

5

0

5

0

Belvedere

13

4

6

2

Tiburon

27

2

16

2

Mill Valley

20

0

3

0

Larkspur

4

0

0

0

Corte Madera

3

0

0

0

Kentfield

8

1

1

0

Greenbrae

0

0

0

0

Ross

4

1

5

0

San Anselmo

8

1

0

0

San Rafael

14

0

3

0

Novato

3

0

0

0

 

The above graph identifies the numbers of active listings and homes in contract in the Marin County luxury ($2 million to $4 million) and ultra-luxury ($4 million and up) home market segments. Note that all homes in contract are included in the category “Pending” even though some are technically “Contingent” properties (e.g., the buyers have not removed all contingencies). This information is limited to Marin County’s Highway 101 corridor towns and cities that consistently maintain a monthly inventory of luxury and ultra-luxury homes (Western Marin coastal homes are not included).

By: Kyle Frazier, Marin Realtor & CRS, Broker Associate, Morgan Lane Marin Real Estate, at 415/350-9440 for more luxury home market information. You can also e-mail Kyle at mailto:Kyle@ImagineMarin.com.