Marin’s real estate market neared a strong close for 2014 as the price of a single-family home jumped 13 percent in November, according to the Marin County Assessor’s Office.
The median price for conventional detached dwellings clocked in at $875,000, compared with $775,000 in November 2012, the assessor reported. Sales dipped five percent, with 185 single-family dwellings selling compared with 195 last November.
Seventy condominiums sold in November 2013, compared with 54 in the same month in 2012, and the median condo price increased from $330,000 in November 2012 to $429,500 in 2013.
The double-digit leap in the median price continued a year-long trend of increases. Real estate agents in Marin predicted a good year in 2014, though not at the same pace as this year.
“In general, the market is healthy. It’s a very positive market,” said Peter Richmond, an agent with Pacific Union International in Mill Valley. “I think prices will continue to rise (in 2014), just not as steeply as happened in the first half of 2013.
“In April, May and June, some homes were up 20 percent or more. I don’t think you are going to see that as a general rule (in 2014),” Richmond said. “It’s going to depend a lot on how quickly interest rates continue to rise and how far they go.”
Richmond and other agents repeatedly referred to the first half of 2013 as a boom period, and seemed to agree that interest rates were the factor that slowed things down somewhat in the second half.
“The rising interest rates are moderating things a bit. Right now they are probably a full percentage point over what they were a year ago today,” said Richmond, who was a banker for 25 years before becoming a real estate agent. “They’re (rates) supposed to continue to go up.”
When interest rates go up, so do a potential buyer’s monthly payments, edging some out of the market who are already stretching to make a purchase.
Just as a matter of perspective, current rates are by no means high in terms of the overall picture.
“These are still historically low interest rates,” said Mary Kay Yamamoto of Re/MAX of Central Marin in San Rafael. “Having been in the business since 1980, I have seen interest rates as high as 16 percent for a first mortgage. Right now they are hovering around 4.25 to 4.50 percent; on any given day, it can shift.”
Yamamoto attributed the five percent November sales drop to what she called “buyer fatigue.”
“For much of 2013, multiple offers on homes and bidding wars were a regular occurrence. Some buyers made so many offers and didn’t have an offer accepted. They had a difficult time competing and they got discouraged,” Yamamoto said.
Jean Mastagni, a broker associate with Coldwell Banker in Mill Valley, attributed the sales drop to the time of year.
“It’s historic. The holidays always slow down the market,” Mastagni said.
The broker associate described the market crash that began around 2009 as unprecedented in Marin.
“I’ve been in the business since the 1970s and have seen every phase. We never had such a long dip in prices as during the five years before 2013,” the broker associate said, adding that 2013 “started with a bang and everything went up. It came back in every price range.”
Bob Ravasio, a Coldwell Banker agent in Greenbrae, elaborated on Mastagni’s comment.
“The annual sales price in Marin increased for some 40 years with just one exception, decreasing around 3 percent in 1990 and 1991, based on numbers from the MLS (multiple listing service),” the agent said. “In the 2009 recession, the annual sales price went down as much as 20-25 percent.
“What’s happening now is as quickly as the bottom fell out in 2009, in 2013 you saw a snap back in the other direction. We’re almost back to where we were in 2006, 2007. We’re getting close to that. I don’t think anyone saw this price recovery happening as fast as it did,” Ravasio said.
One of the principal factors spurring the recovery: The dearth of homes on the market.
“You’re seeing the laws of supply and demand play themselves out. Demand is very strong, and there’s not that much inventory. So what remains continues to get bid up,” the agent said.
Patti Cohn, a broker with Pacific Union, echoed Ravasio’s sentiments.
“Right now around 49 percent of the homes on the market in Marin are in contract, meaning that a buyer has purchased the home and is waiting for the sale to close,” Cohn said.
“If you have 100 homes on the market and 49 of them are in contract, that’s an unusually high number. Anything over 30 percent is considered a seller’s market,” the broker said. “If it’s 25 to 30 percent, it’s a normal, neutral market.”
As more homes come on the market and supply increases, this should temper price increases, Ravasio said.
“What you’re seeing now is fairly characteristic of what you would expect to see coming out of a low period,” Ravasio said. “Buyers are always leading the market; they went away in 2009 and came back strong in 2013, and sellers haven’t caught up yet.
“I think we are going to see more homes on the market in 2014,” Ravasio said. “You will see prices increase, just more modestly.”