Marin Buyers Prefer “Done” Homes, Average Sale Price Jumps $38k in One Day

It’s mid September and the usual Indian Summer may or may not be around the corner. Who knows anymore, with this strange weather we’ve had the last 5-6 years. Four years of drought has resulted in voluntary cutbacks on water usage by 30% here, even though our five reservoirs are stocked full of water. Still, we’re a fairly environmentally aware, green county pretty much at the forefront of conservation, though not necessarily “conservative”. Let’s see what this upcoming rain storm brings us, they say maybe half an inch.

Speaking of not that conservative, the talk around town is of two recent big home sales: one for $47,500,000 the other for $8,125,000 remarkable mainly in that they posted on the same day. See them here, but the $47.5 mil sale in Belvedere was our highest recording ever, making the headline of the Independent Journal, see it here.

 

Locksley Hall in Belvedere

Besides closing escrow so close together, the higher one was also notable selling at 97% of the list price, even after a “short” (for the higher end) 207 days on the market (DOM). It was also the fifth home sale in 2015 here over $10 mil, something that’s never been achieved. The other “cheaper” home belonged to Giants pitcher Barry Zito and had been on the market over twice that, at 520 DOM. Both homes were done, with no work to do by the next buyer, or buyers as it were. And I certainly hope so at those prices.

This is a trend we’ve seen over the years, with buyers preferring to avoid fixer uppers and instead purchase homes that are turn-key or ready for occupancy. What is it: lack of know how, lack of time or patience that motivates this? Probably all three to some degree, but it certainly isn’t due to lack of money or a dearth of HGTV shows on how to fix up a home, cosmetically or otherwise. But with construction costs for labor and materials going up roughly 10% a year, along with rising home values, smart buyers are locking in to today’s value on both fronts, as evidenced here though to a much higher degree than our average price of approx $1.3 mil – $1.4 mil. And you think that number drifted before these sales. Look at these two stats:

The stats on the left shows the Average home sale price YTD before the $47.5 mil closing, the second stat after: a $38,000 jump.

For the month, let’s see where September goes, but traditionally, the back-from-vacation and back-to-school month of August real estate slowness tends to extend to Labor Day. From there, it’s anybody’s guess how much it will ramp back up. Given the economic uncertainty lately, it’s doubtful the Feds will raise interest rates, leading to further fuel for homebuyers to lock in a low interest rate for the long term. Smart buyers know that a lot of hard earned money can be saved over time by a half a point lower in mortgage interest, to say nothing of locking in a tax base at today’s prices as a hedge against tomorrow’s appreciation. Either way, none of us sees any reason why home prices shouldn’t keep slowly rising. Buyers remain ever optimistic in the Marin quality of life and many have taken a few acorns off the table with stocks, given the sharp declines that can damage their accounts. For a stable sleep-at-night factor, it’s tough to beat home ownership pretty much anywhere in the North Bay.

This front page article in the IJ this month also discusses our great schools here in the county. Read it here.

So enjoy September wherever you are. Any questions, let me know how I can help. I’m around all month.

TS

Text or call 415.377.5222 or ted@gomarin.com

Filed under: Marin Real Estate Blog by Ted Strodder