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

Pacific Union – Christie’s International Real Estate | Marin County, CA Luxury Home Sales (January 2013)

Pacific Union – Christie’s International Real Estate | Marin County, CA Luxury Home Sales (January 2013). The new year dawns with bright prospects for an active and successful 2013 in Bay Area real estate. But 2013 comes after an awkward year of recovery. Buyers, champing at the bit after a half-decade of retrenchment and recession, were forced to compete with each other for a limited supply of homes as sellers held out for higher prices after years of declines. Bidding wars became commonplace. However, prices drifted only slightly higher despite excruciatingly low inventory. Here’s a look back at the busy year that just ended:

JANUARY — The latest jobs data shows the first signs of economic recovery, with California’s unemployment rate falling to 11.1 percent in December 2011, the second month in a row the number declined. (Quick jump ahead: by November 2012 the unemployment rate had dropped further, to 9.8 percent.). Pacific Union International’s Q4 2011 Real Estate Report is released. In it we declare that 2012 “could be one of the finest times in the past twenty years to be a buyer of real estate,” with low home prices and exceptionally low interest rates. We were right on the money.

FEBRUARY — Sellers are urged to “join the party” as the number of homes under contract jumps significantly. In Marin County, homes under contract were up an astounding 82 percent from the start of the year. A look at the math shows that historically low interest rates give homebuyers an extra $100,000 in purchasing power. (And it still holds true today.)

MARCH — Rental rates are rising precipitously across the Bay Area — up 16 percent in San Francisco — making buying a home an even more attractive option.

APRIL — Pacific Union gets kudos from our peers with the release of a Real Trends survey showing that our real estate professionals are the fifth most productive in the United States and a report from Real Estate Magazine naming us one of the nation’s top “Power Brokers.” Buyer demand in the first quarter drives an increase in the number of homes sold in all seven of Pacific Union’s Bay Area regions. The upcoming America’s Cup yacht races are fueling a boom in San Francisco real estate as buyers jockey for homes with commanding views of San Francisco Bay.

MAY — Homes are more affordable than ever, according to a report from the California Association of Realtors. The percentage of households that could afford to purchase a median-priced, single-family home in the Bay Area rose to 45 percent in the first quarter, a record high. Rising home sales and prices make clear the housing recovery is on solid footing in the Bay Area, according to our own monthly market analysis and a report from the California Association of Realtors. Pacific Union expands in Northern California with the opening of offices in the North Lake Tahoe area.

JUNE — The Bay Area housing market and overall economic scene continue to set the pace for the national recovery, and sometimes that means standing in contrast to gloomy national reports. We’re pleased to report that Pacific Union is expanding again, this time launching Pacific Union International Property Management Inc. Kudos continue: A list of the top 1,000 real estate professionals and teams in the United States includes three from Pacific Union. Reports in the national news media declare that “the housing bust is over,” which comes as no surprise to homebuyers and sellers in the Bay Area.
JULY — Pacific Union’s exclusive interview with economist Stephen Levy makes clear that the economic recovery has reached all corners of the Bay Area and is enduring. Our Q2 Real Estate Report shows home sales are up more than 30 percent across the Bay Area, foretelling a strong year ahead.

AUGUST — The Bay Area continues to lead California’s economic recovery, and that’s good news for the region’s housing market. In a sign of how tight the housing market has become, the Oakland metro area is No. 1 in the nation for the greatest reduction of homes for sale. It’s also No. 1 for the shortest number of days on the market.
SEPTEMBER — Foreclosure activity drops sharply across the Bay Area, led by San Francisco, where notices of default — the first step in the foreclosure process — fall 71 percent from a year ago. The Bay Area’s red-hot real estate market continues to set records, with August home sales at a six-year high. Home ownership can bring big savings when compared with the cost of renting in San Francisco and Oakland, according to a report from the online real estate search service Trulia.
OCTOBER — The East Bay housing market has trailed San Francisco in its recovery from the recession, but recent reports suggest the region’s economy is poised for substantial growth in the coming year. Our Q3 Real Estate Report has plenty of good news in it: Home values are rising, foreclosures are dropping, and housing starts are increasing across the Bay Area. We’re on track to see the best year in housing since 2005 in many regions.
NOVEMBER — The monthly Case-Shiller home prices report confirms that home prices continue to rise at a steady pace across the Bay Area as well as nationwide, but a close look at the numbers also reveals much more: the extent of the housing market collapse five years ago and the strength of the recovery now under way.
DECEMBER —  The supply of homes for sale in the Bay Area remains severely constrained, but that hasn’t held back buyers. They’re snapping up properties at a pace we haven’t seen in at least six years. Tech companies like Pinterest and Square are increasingly choosing San Francisco over Silicon Valley for office space, and that’s having a direct effect on residential real estate in the city. The Bay Area continues to drive California’s economic recovery, with the state’s unemployment rate dropping below 10 percent for the first time in nearly four years. That’s a good sign for real estate markets.

Source: PacUnion.com

Kyle Frazier, J.D. & Broker, Certified Luxury Home Marketing Marketing Specialist (CLHMS), Certified Residential Specialist (CRS), Realtor with Pacific Union | Christie’s International Real Estate. Call Kyle Frazier at 415/350-9440 for more luxury home market information in Marin County, California (the San Francisco Bay Area’s “North Bay”).

Marin County, California, Luxury Homes Report (March 2010–Sales and Inventory Analysis)

Marin County, California’s luxury home market continues to recover from the wasteland of late 2008 and early 2009 when it seemed as though the luxury home market would never recover. Yet, as reported in previous months, real buyers continue to snap up homes in prestige locations such as Belvedere, Ross, Kent Woodlands, etc., along with “value” properties with undeniable upside. In the $2 million to $4 million price band, sales are up 300% over last year and inventory is down 25% — this combination of factors looks promising for continued improvement. For a detailed snapshot of current national trends from the Institute for Luxury Home Marketing, click HERE.

$2 Million to $4 Million Luxury Homes

The $2 million to $4 million price band  remains volatile with prices down 17% over the past 2 years. Despite this obvious and well-noted trend, many sellers have not adjusted their asking prices to reflect market realities. As noted in my columns over the past two years, a seller’s refusal to price correctly at the outset of the listing period is the single greatest mistake possible. Often, listing agents are willing accomplices however because they will “say anything” to obtain the listing. However, bottom line costs to sellers is very significant. I have developed a chart that show exactly just how bad it gets over time when Marin County sellers and their agents) overprice their homes — please call or e-mail me for a copy.

Following a lackluster January 2010, sales in February 2010 exploded with 9 trades, despite the typical seasonal slowdown. Moreover, we have another 16 homes currently in escrow. Certainly, buyers are feeling some urge to buy as it appears that the poor economic environment may be improving and the pricing in the marketplace suggests “value.” Inventory remains low (although higher than last month) at just 75 homes on the market.

Cities recording February 2010 sales in this price band included: Belvedere (1), Mill Valley (4), Kentfield (1), and Ross (1), and Greenbrae (2). These homes averaged 139 days on market. Their average sales price was $2.612 million (roughly $649 per square foot), with an average of 4,046 square feet. The absorption rate for Marin homes in this price band is 8.3 months.

$4 Million & Up Ultra-Luxury Homes

The already low inventory level of Marin County’s ultra-luxury market (homes priced in the $4 million and up range) held relatively even this month — there are 40 homes for sale compared with 36 last month. The highest concentrations of homes in this price band are Tiburon and Belvedere. Marin County experienced 2 sales last month in this price band — same as in January. Such limited sales activity vitiates the possibility of meaningful analysis. Sales are expected to pick up in the coming months as we head into the traditional selling season.

By: Kyle Frazier, Certified Luxury Home Marketing Marketing Specialist (CLHMS), Certified Residential Specialist (CRS), Broker Associate, Realtor | Christie’s Great Estates — Morgan Lane International. Call Kyle Frazier at 415/350-9440 for more luxury home market information in San Francisco and Marin Counties.

Marin County, California, Luxury Homes Report (February 2010–Sales and Inventory Analysis)

Marin County, California’s luxury home market continues to recover from the proverbial wasteland of late 2008 and early 2009 when it seemed as though the luxury home market would never recover. Yet, as reported in previous months, real buyers continue to snap up homes in prestige locations such as Belvedere, Ross, Kent Woodlands, etc. Indeed, “value” properties are gobbled up quickly. Despite this apparent thirst for luxury digs, inventory levels remain 40% higher than two years ago. This trend is not unique to Marin, but prevails nationwide. For a detailed snapshot of current national trends from the Institute for Luxury Home Marketing, click HERE.

The below chart reflects the number of homes in the $2 million to $4 million luxury price band which are in escrow (compared against the past 2 years). Note that the number of homes with accepted offers (not closed sales), is up 50% from 2 years ago and 450% from last year. This is a promising trend.

Another statistic that may not be readily apparent to casual observers is the fact that prices in the $2 million to $4 million price band are stabilizing as median sales prices countywide are down just 6% over the past 2 years. Of course, the impact of the downturn varies greatly by neighborhood and even within neighborhoods based on amenities.

$2 Million to $4 Million Luxury Homes

Following a very strong November and December 2009, sales in January 2010 reflected our typical seasonal slowdown as Marin County recorded just 4 trades. Yet, we have another 13 homes in escrow. Certainly, buyers are feeling some urge to buy as it appears that the poor economic environment may be improving and the pricing in the marketplace suggests “value.” Inventory remains low (although higher than last month) at just 70 homes on the market between $2 million and $4 million.

Cities recording January 2010 sales in this price band included: Belvedere (1), Mill Valley (1), Kentfield (1), and Tiburon (1). These homes averaged 239 days on market. Their average sales price was $2.542 million (roughly $626 per square foot), with an average of 4,015 square feet. The absorption rate for Marin homes in this price band is 17.5 months (which is high due to the low number of trades and increased inventory).

$4 Million & Up Ultra-Luxury Homes

The already low inventory level of Marin County’s ultra-luxury market (homes priced in the $4 million and up range) held steady at 36 homes for sale. The highest concentrations of homes in this price band are Tiburon and Belvedere. Marin County experienced 2 sales last month in this price band — one was Sean Penn’s estate and the other was a one-of-a-kind supreme location estate which sold for $14 million. Both sales were in Ross and the latter was accomplished via a Morgan Lane buyer client.   

By: Kyle Frazier, Certified Luxury Home Marketing Marketing Specialist (CLHMS), Certified Residential Specialist (CRS), Broker Associate, Realtor | Christie’s Great Estates — Morgan Lane International. Call Kyle Frazier at 415/350-9440 for more luxury home market information in San Francisco and Marin Counties.

Marin County, California, Luxury Homes Report (January 2010–Sales and Inventory Analysis)

Home sales in Marin County, California’s luxury price bands continue to recover from the proverbial wasteland of late 2008 and early 2009 when it seemed as though the luxury home market would never recover. Yet, as reported in previous months, real buyers continue to snap up homes in prestige locations such as Belvedere, Ross, Kent Woodlands, etc. Indeed, “value” properties are gobbled up quickly. Despite this apparent thirst for luxury digs, inventory levels remain 40% higher than two years ago. This trend is not unique to Marin, but prevails nationwide. For a detailed snapshot of current national trends from the Institute for Luxury Home Marketing, click HERE.

The below graph tracks asking prices for 3 popular cities in Marin — Tiburon/Belvedere (they are combined here because they use the same zip code), Mill Valley, and Kentfield.

Year over year luxury market inventory levels in Mill Valley have hovered at around 20% higher than last year for 6 months (and are now down to about 12%). Meanwhile, inventory in Kentfield is up 22% and Tiburon – Belvedere inventory levels are over 42% higher than last year.

Below is a new chart focusing on the percentage of homes that have experiencd price reductions and the depth of those price reductions, on average. This chart examines these trends in Mill Valley and in Belvedere – Tiburon. It is perhaps not surprising that approximately 17% of listings in Tiburon – Belvedere have experienced a price reduction and those reductions average about 8%.

Real Estate Market Chart by Altos Research www.altosresearch.com

$2 Million to $4 Million Luxury Homes

Following a strong November, sales in December (a traditionally slow month) were also quite high given the typical seasonal slowdown. With 15 trades, this December was stronger than anybody may have anticipated six months ago. Additionally we have 12 more homes in escrow. Certainly, buyers are feeling some urge to buy as it appears that the poor economic environment may be improving and the pricing in the marketplace suggests “value.” Inventory is low, as is typical this time of year, with just 56 homes on the market between $2 million and $4 million.

Cities recording December 2009 sales in this price band included: Belvedere (1), Ross (3) Mill Valley (2), Larkspur (1), Kentfield (1), Tiburon (5), and San Rafael (1), and San Anselmo 1). These homes averaged 139 days on market. Their average sales price was $2.626 million (roughly $715 per square foot), with an average of 3,968 square feet. The absorption rate for Marin homes in this price band is about 3.7 months (down from 13 months in November — this huge reduction is the result of seasonally reduced inventory levels).

$4 Million & Up Ultra-Luxury Homes

The already low inventory level of Marin County’s ultra-luxury market (homes priced in the $4 million and up range) dipped to 34 homes for sale. The highest concentrations of homes in this price band are Tiburon and Belvedere. Marin County experienced just 1 sale last month in this price band. It was a $5.4 million Belvedere estate with great views: days on market – 315, price – $5.4 million, square feet – 7,300.  

By: Kyle Frazier, Certified Luxury Home Marketing Marketing Specialist (CLHMS), Certified Residential Specialist (CRS), Broker Associate, Realtor | Christie’s Great Estates — Morgan Lane International. Call Kyle Frazier at 415/350-9440 for more luxury home market information in San Francisco and Marin Counties.

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

Building on a trend noted in last month’s report, media coverage of the overall economy has improved. In particular, reporting on the housing market. Forecasters are predicting that 2010 will be the first year since 2005 for housing to contribute to the growth of the U.S. economy (based on a survey by the National Association for Business Economics). According to that organization, home prices are expected to rise 2 percent next year — over 80% of economists surveyed think the recession is over and recovery has begun. The Mortgage Bankers Association Chief Economist Jay Brinkmann, predicts that sales of existing homes will rise 11 percent in 2010, with sales of new homes climbing 21 percent.

But, perhaps more importantly, the Dow Jones has rocketed up past 10,000 and the tone of the W-shaped recovery dialogue has moderated. It was announced today that JPMorgan Chase plans to hire 1,200 mortgage bankers in light of improved housing market and signs of stability.

Finally, we know from past experience that in down cycles, once the San Francisco housing market recovers, there is a domino effect on surrounding communities. Accordingly, in our current cycle, we believe that our best leading indicator regarding a healthy, appreciating market (particularly in Southern Marin) will be the home sales environment in San Francisco. And there can be no doubt that the San Francisco market has improved dramatically in recent months. Additionally, as the banking institutions regain their footing and again provide bonuses to their employees, we will also see a surge in luxury home sales. In fact, if bonuses are significant and broad-based, I predict a very strong luxury sales market early in 2010 as buyers snap up the many “values” out there in the luxury and ultra-luxury sectors.

As reported in previous months, real buyers have become less numerous. They are placing emphasis on prestige locations, views, lifestyle amenities (usable yards, proximity to clubs/shopping, etc.), schools, and sensible scale. And they are seeking “value.” The Marin County luxury market has favored homes priced under $3 million — although 5 homes traded over $4 million in November 2009. [For a detailed snapshot of current national trends from the Institute for Luxury Home Marketing, click HERE. And if you would like a hyper-local report relating to any town or zip code in Marin or San Francisco, e-mail or call me at (415) 350-9440.]

The below graph tracks asking prices for 3 “hot” locales in Marin — Tiburon/Belvedere (they are combined here because they use the same zip code), Mill Valley, and Kentfield. Interestingly, while Belvedere continues to see asking prices drop, Kentfield and Mill Valley have seen asking prices increase over the last 4 months. Of course, asking prices do not necessarily closely reflect selling prices and in Mill Valley, there are lots of homes on the market in the higher price bands, which have not sold.

The year over year inventory levels in Mill Valley have hovered at around 20% higher than last year for 6 months, but has dipped to about 15%. Meanwhile, inventory in Kentfield is up 65% and Tiburon – Belvedere inventory levels are over 90% higher than last year.

Below is a new chart focusing on the percentage of homes that have experiencd price reductions and the depth of those price reductions, on average. This chart examines these trends in Mill Valley and in Belvedere – Tiburon. It is perhaps not surprising that nearly 35% of listings in Tiburon – Belvedere have experienced a price reduction and those reductions average about 12%.

Real Estate Market Chart by Altos Research www.altosresearch.com

$2 Million to $4 Million Luxury Homes

As we begin to see the contours of the Winter market form, many feel we will have an active Winter. Many agents are noting (and this is backed up by the numbers) that we had our best month of the year in October. Buyer activity has picked up significantly. The number of sales (9) and homes in escrow (17) remain quite strong. There is a lot of home shopping going on as patient buyers have begun snapping up homes that they perceive represent “value.” I expect that next month will see a continued surge of sales. Inventory remains low with 108 homes on the market between $2 million and $4 million.

Cities recording sales in this price band included: Tiburon (1), Belvedere (1), Ross (1) Mill Valley (3), Sausalito (1), and San Rafael (2). These homes averaged 98 days on market. Their average sales price was $2.858 million (roughly $799 per square foot), with an average of 3,673 square feet. The absorption rate for Marin homes in this price band is about 12 months (down from 18 months in October).

$4 Million & Up Ultra-Luxury Homes

The inventory level of Marin County’s ultra-luxury market (homes priced in the $4 million and up range) remained virtually unchanged with 47 homes for sale. The highest concentrations of homes in this price band are Tiburon, Belvedere, Sausalito, and Ross. As noted earlier, Marin County experienced 5 sales last month and these homes had the following characteristics: days on market – 111, price – $5.86 million, square feet – 5,030, price per square foot – $1,011. Note that Christie’s | Morgan Lane agents were involved in three of the five sales in this price band last month.

By: Kyle Frazier, Certified Luxury Home Marketing Marketing Specialist (CLHMS), Certified Residential Specialist (CRS), Broker Associate, Realtor | Christie’s Great Estates — Morgan Lane International. Call Kyle Frazier at 415/350-9440 for more luxury home market information in San Francisco and Marin Counties.

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

Marin County, CA’s luxury real estate market segment is slow and remains weighted towards homes priced under $4 million — just one home priced over $4 million sold in June 2009 and it was an off-the-market sale. The number of sales in June 2009 is off by over 40% from June 2008, yet the average price of sold homes is down just 3% from last year. In Marin, only the homes with special locations, views, or features seem to be getting significant attention. For a detailed snapshot of current national trends from the Institute for Luxury Home Marketing dated July 19, 2009, click here. Note, if you would like a local report relating to any town or zip code in Marin or San Francisco, call me at (415) 350-9440. Yet, the news relating to home starts and permit applications is again improved this month. As earnings reports come in for Q2 and the stock market has found some hope in the numbers, it does not appear that such developments consitute the siren call buyers seek. 

As noted last month, buyers remain dubious of price stability for good reason. But, increased conforming loan limits and a pronounced level of increased affordability across the board should help sales moving forward into the Summer as buyers with 25% down will obtain top-shelf financing for purchases of $1.6 million. While not “Luxury” territory here in Marin, a sizable segment of buyers of luxury homes must sell their current homes first (80% of buyers are sellers). The chart below indicates that across the trend in Marin’s luxury segment is for lower prices — 10% to 28% lower than last year in Mill Valley, Belvedere, and Kentfield.

The year over year inventory levels in Mill Valley have hovered at around 20% for the past couple of months. Meanwhile, inventory in Kentfield has rocketed to 60% higher than last year. Belvedere is 75% higher than last year. Prediction: Kentfield and Belvedere prices will continue to recede markedly through Q4 2009. Indeed, we can see that trend has set in dramatically in the above chart.

Despite the apparent slowdown, open houses have been extremely busy. Offers are being written. And our agents are noting a more focused approach by buyers. One listing in our office, priced at over $10 million went into escrow last week after just 3 days on the market. We are also starting to see buyers lose out on properties they loved because they assumed there was no urgency in writing an offer. 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, although asking prices appear to have leveled in Mill Valley and Tiburon.

 

Below is a new chart focussing on the percentages of homes in Tiburon and Mill Valley that have experienced price reductions, as well as a look at how deep those reductions have been, on average.

Real Estate Market Chart by Altos Research www.altosresearch.com 

The definition of this market stat is:

“Percentage of homes on the market that have decreased their asking price at least once over the past 90-day period.” In any market, even in strong seller’s markets, there will always be some number of properties that will decrease their listing price. These may include sellers that drastically overpriced their homes just “to see what they could get” or homes that simply entered the market at a price level above what the market will bear.

Even in strong seller’s markets, the Percent Price Decreased will be 10-12%, so some repricing of individual properties is common in any market. In weaker markets, this value begins rise into the teens, 20%, 30%, and higher. Percent Price Decreased is an incredibly insightful gauge of demand levels in the residential housing market. This statistic illustrates how many listed properties may be behind the “price curve” – listed at a price above what the market is willing to pay for similar properties. However, “Percent Price Decreased” alone does not indicate the overall health of a particular market. This statistic should be combined with other market stats to determine the overall direction of a market.

$2 Million to $4 Million Luxury Homes

Historically, the Summer has been slow for Marin real estate because many families focus more on vacations than on home buying. But nothing has gone according to historical precedent in 2009. And this year buyers seem to be spending time between school years focussing on locating the perfect home at a value price. Inventory hovers at 135 homes on the market between $2 million and $4 million (down from 143 last month, but up from 110 in March).

Quick recap: Since the emergence of the “new economy” (typically identified as post-October 2008), sales numbers in this price band are down overall, but improving. For example, there were 18 sales in October 2008 (a relatively strong time of year for sales and, of course, these buyers were well into their escrow periods at the time of the meltdown). Then, by February 2009, sales dipped to just 2. As things began to improve in April & May 2009, sales bumped up to 8. The first 3 months of 2009 were simply abysmal. Overall, the past six months were the worst we have seen in 16 years. 

Yet, June 2009 was realtively strong with 16 sales and today we have an additional 18 homes in escrow. To sustain the apparent transition, we will need to see a sustained level of demand. May and June 2009 activity may represent the beginning of this recovery. However, the current rally described here applies only to units sold, not price appreciation.

Cities recording sales in this price band include: Tiburon (3), Belvedere (1), Mill Valley (3), Larkspur (1), and Kentfield (1), Ross (4), San Rafael (1), and Novato (1). These homes averaged 70 days on market. Their average sales price was $2.6 million (roughly $714 per square foot), with an average of 3,769 square feet. We also have a good number of homes in the escrow pipeline, including homes in Belvedere (4), Tiburon (5), Mill Valley (2), Ross (2), and Kentfield (2), and San Rafael (1), and Novato (1). The absorption rate for Marin homes in this price band is reduced to just under 10 months (down from nearly 18 months). Sellers must position their home at the head of the line when it comes to pricing if they want to sell.

$4 Million & Up Ultra-Luxury Homes

The inventory level of Marin County’s ultra-luxury market (homes priced in the $4 million and up range) remained static with 55 homes for sale. The highest concentrations of homes in this price band are Tiburon, Belvedere, and Ross. As referenced above, there was just one sale last month — an off-the-market sale of a spectular home for $5 million in Mill Valley’s Country Club neighborhood. We have 2 homes currently in escrow in this price range. Marin cities and towns with homes priced over $4 million include Tiburon, Belvedere, Sausalito, Kentfield, Ross, Mill Valley, San Rafael, and Novato. The absorption rate for these homes cannot be accurately stated as the number of sales is too low to be meaningful.

Marin Cities & Towns

$2 Million — $4 Million

$4 Million & Up

Active

Pending

Active

Pending

Sausalito

13

1

7

0

Belvedere

26

4

11

0

Tiburon

20

5

20

1

Mill Valley

30

2

4

0

Larkspur

3

0

0

0

Corte Madera

1

0

0

0

Kentfield

12

2

3

0

Greenbrae

1

0

0

0

Ross

8

2

7

1

San Anselmo

7

0

0

0

San Rafael

7

1

2

0

Novato

6

1

1

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.

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

Real estate sales in Marin County’s luxury segment are currently weighted towards homes priced under $4 million. In fact, not a single home priced above $4 million is in escrow (although that could change in a moment as the domino effect is very real in home sales). But, as it stands, the ultra-luxury home sales segment is flat-lining in Marin County, CA. For a detailed snapshot of current national trends from the Institute for Luxury Home Marketing, click here (May 17, 2009 Report). Note, if you would like a local report relating to any town or zip code in Marin or San Francisco, call me at (415) 350-9440.

Yet, the news relating to home starts and permit applications is improving: the West experienced a 42.5% jump in housing starts; the National Association of Homebuilders reported increased confidence (as high as it has been in 9 months); and construction and permits both rose last month (these are considered leading indicators on the macro level relating to housing stability). Nonetheless, the inertia of caution remains firm.

Buyers are dubious of price stability for good reason (see chart below reflecting year over year prices in Tiburon, Mill Valley, and Kentfield). But, increased conforming loan limits and a pronounced level of increased affordability across the board should help sales moving forward into the Summer as buyers with 25% down will obtain top-shelf financing for purchases of $1.6 million. While not “Luxury” territory here in Marin, many buyers of luxury homes must sell their current homes first (80% of buyers are sellers).

Real Estate Market Chart by Altos Research www.altosresearch.com

Curiously, inventory levels in Kentfield and Mill Valley have risen moderately over last year, while Belvedere’s inventory has skyrocketed by over 60%. Prediction: Belvedere prices will continue to recede markedly through Q4 2009. Indeed, we can see that trend has set in dramatically in the above chart.

Real Estate Market Chart by Altos Research www.altosresearch.com

Despite the apparent slowdown, open houses have been extremely busy. 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 loved because they assumed there was no urgency in writing an offer. 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.

Real Estate Market Chart by Altos Research www.altosresearch.com

$2 Million to $4 Million Luxury Homes

The scuttle on the street is that the 2009 Spring selling season will continue through the Summer as buyers spend time between school years to locate and buy the perfect home at a value price. Inventory has climbed to 146 homes on the market between $2 million and $4 million (up from 130 last month and 110 in March). 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 relatively 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. In April 2009, that number jumped back up to 8 sales.

Cities recording sales in this price band include: Tiburon (1), Belvedere (1), Sausalito (1), Mill Valley (2), Corte Madera (1), and Kentfield (2). These homes averaged 81 days on market (a testament to pricing your home to sell from the outset). Their average sales price was $2.458 million (roughly $721 per square foot), with an average of 3,547 square feet. We also have a good number of homes in the escrow pipeline, including homes in Belvedere (3), Tiburon (4), Mill Valley (5), Ross (5), and Kentfield (2). Last month, 25% of the contracts for homes in escrow were cancelled. The absorption rate for Marin homes in this price band is well over 1-year.

$4 Million & Up Ultra-Luxury Homes

As expected, the inventory level of Marin County’s flat-lining ultra-luxury market (homes priced in the $4 million and up range) rose last month by 33% to 60 homes for sale. The highest concentrations of homes in this price band are Tiburon, Belvedere, and Ross. There was just 1 sale in Belvedere. The Belvedere home was a remodeled estate with jetliner views of the Golden Gate Bridge and San Francisco — it sold for $5.4 million (about $1,148/per sq. ft.). There are no homes currently in escrow in this price range. Marin cities and towns with homes priced over $4 million include Tiburon, Belvedere, Sausalito, Kentfield, Ross, Mill Valley, San Rafael, and Novato. The absorption rate for these homes cannot be accurately stated as the number of sales is too low to be meaningful.

Marin Cities & Towns

$2 Million — $4 Million

$4 Million & Up

Active

Pending

Active

Pending

Sausalito

10

0

6

0

Belvedere

19

3

11

1

Tiburon

32

4

21

0

Mill Valley

29

5

4

0

Larkspur

9

0

0

0

Corte Madera

2

0

0

0

Kentfield

12

2

4

0

Greenbrae

3

0

0

0

Ross

9

5

9

0

San Anselmo

8

0

0

0

San Rafael

9

1

4

0

Novato

4

0

1

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.