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Ted Strodder


415.377.5222
Golden Gate
Sotheby's International Realty
189 Sir Francis Drake Blvd
Greenbrae CA 94904

Marin Real Estate Blog

“Buyers and Sellers Watch For a June Swoon as Market Cools Nationwide”

Is it really June already? Man, where does the time go. It’s so frenetic lately I often don’t know what day it is. Mid week is the worst with Tues-Thurs often being a blur, given it’s been a seven days work week for two straight years now. Don’t get me wrong, I love what I do and am blessed to work with (and around) some terrific people. So if it continues like this, I’m absolutely fine with that. I just don’t know. There may be a slight cool down coming and a return to normality, which is also fine, as long as my buyers or sellers get where they want to go. The big question is, at what cost? For that, we go to some recent data, both nationwide and locally.   

Corelogic just posted another uptick of 20% appreciation over the last 12 months on their U.S. Home Price Insights. You’ll see some easy to read charts, along with some not-so-easy-to-read ones, but you’ll note a forecast of only a 5.9% increase in home prices over the next year. That’s a significant reduction and due in part to both the release of thousands of newly constructed homes throughout the country, but also rising interest rates and a declining stock market. But it is on prices nationwide, not in all areas. Predictions are that many of the smaller, regional markets may outperform that, albeit slightly. Home prices in the Bay Area and Marin are forecast to rise only 7%-9% which is our typical average and a far more normal market. Given there’s no new construction here, we’re still subject to higher interest rates and economic volatility in the stock market. We’ll see where we go, but a cooling will certainly be a welcome sight to many buyers, mine included. 

Many of us busy, usually productive agents have had several buyers lose out on properties in the last few months. The normal 5-10 multiple offers pushed prices up into a range that none of us were comfortable with, for starters. Also, many winning offers are all cash with no mortgage, which isn’t a smart or safe practice unless your net worth is a 5X on whatever you’re purchasing. Always carry a mortgage if you can, they’ve always said and I believe in that. Even if you’re paying 5% interest, after your tax write off, it’s much closer to a net of 3%. So if any of you have lost out to an offer that’s way over any reasonable value, don’t worry. Be cautious and be patient as if feels like the market will adjust to you, at least given all we’re hearing and reading. 

Sellers? Step lightly and with great caution also. Listen to your agent and do all the required fix up, no matter how long or for how much $$. When you’re ready, check your Zestimate on Zillow and don’t be afraid to price 5% under that. You may have only one chance to grab a buyer in the next thirty days, no matter what month that thirty days is in. If you price it right, you could still see multiple offers (as we’re seeing here). If not, you’ll be priced to sit, not priced to sell, with buyers looking at what’s wrong with it, not what’s right with it, which is happening here too and everywhere else. The selling season is now and usually only goes through July for the most part. If you don’t want to really sell and just want to try it and put your toe out there in selling pool, go ahead. Most agents will work with you and invest time on your behalf as you never know what may happen.   

That’s it for now. It’s a whole new world and I for one am very curious to see what happens. In my thirty-five years of doing this, I’ve never seen anything like what we have right now with strong demand and limited supply, coupled with a very dynamic, ever-changing economy. Until next time, enjoy June wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

May Marin Market: Same Story One Year Later

May is here in Marin and as I stand at my ergonomic desk to write this, something occurs to me: So little has changed in the past year, I could take the newsletter for last May and just cut and paste it here. The home buying frenzy has continued, despite a much lower stock market and much higher interest rates, neither of which has slowed buyers seeking the new dynamic of what “home” means. It’s now a much more important place to call live, work and play, not just a place to sleep. This has nudged buyers to write bigger and bigger offers, believing this will be a 15-20 year home, so why not pay a little more today for a great place to live? At least this is what we’re seeing in the nicer areas of California. Anyway, here’s what I said 12 months ago. See if this sounds familiar: 

May 1, 2021

As the sun warms the county, people are moving from indoors to out. Given the new relaxed mask mandate, out they will go. We’ve all been cooped up and restricted for much too long and this summer couldn’t come at a better time. Walk the trails, ride the bike paths or just stroll the open air malls of Corte Madera these days. Not only can you see the relief in people’s eyes, you can feel it.

Unfortunately, there’s not much relief for Marin home buyers these days. Inventory remains at record lows, with home sales setting new highs every day, though with higher values, not higher volume. This is good news for sellers, but most of those folks are going to turn right around and become buyers. Very few go back to renting. As I say when I counsel folks when they’re proposing to sell, “Great, your house will sell quickly and likely at a record price for the neighborhood. Now where you gonna go?” 

See what I mean? Still the same low inventory of homes and high inventory of buyers, though the next few months will be very telling on that. May and June tend to be a big buying and selling season for Marin, with people trying to get their housing plans locked and in place by the end of July. Any interest rate increase usually propels buyers forward even further (and often faster) for fear of higher rates to come. That’s how it’s gone for the last three decades for me, anyway, but we’ll see this year. It’s a new world, so we won’t know where we’re going until we look back and see where we’ve been. For now, it appears to be more of the same. Until next time, enjoy May wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

“Hey Ted, When is the Market Going to Slow Down?”

It’s April already in Marin and what a frenetic start to our year with the local real estate market. As you may have read last month, it’s been just as crazy as you think it has with multiple offers and home prices being moved up slowly and methodically. It’s not hard to figure out why, given the supply and demand economy of the housing market. People continue to want to live here more than most places due to the quality of life, we get it. It’s not hard to figure out how long it’s going to last and where prices might be going, though it’s a question I’m asked at least once a day, and that’s just from my kids. 

We have some of the lowest numbers for available housing inventory I’ve seen in my 36 years of doing this. Back in the day, we’d have anywhere from 1,000 – 1,200 combined homes and condo’s to show prospective buyers. Today, that number is exactly 173, ranging from a low of $125k for a retirement home condo in San Rafael to a spectacular $60 mil Sotheby’s listing in Belvedere. If that’s too rich for you, the next highest is a mere $39 mil we’re also offering in Belvedere with the prices just dropping from there to $31 mil and on down. But in all of our twelve towns: 

  • Only 14 of those are priced under $1 mil
  • Only 40 are priced $1 mil – $2 mil
  • And 34 of those are in the $2 mil -$3 mil range  

Not a lot to choose from if you have a list of boxes you need to check for that next house. At least you won’t use a lot of gas at $6 a gallon, driving around to look at half a dozen homes to choose from. If you have more than one, you’re right in the norm. 

As for buyers, we have some of the highest numbers of those I’ve ever seen. Way back when, any agent would have maybe 2-3 well-qualified buyers they were working with. Some of those had a house to sell, meaning they were a “Contingent” buyer, though there was always a 14 day inspection contingency and a 21 day loan contingency with every written offer. Today, we all seem to have at least 5-6 active buyers, none of whom have a house to sell and all of which have read a complete Disclosure Packet in advance, all are fully loan approved or all cash too, meaning no contingencies at all. They offer over asking, and they still may not be successful, so it’s on to the next one with all the other second place finishers. But how long can this continue? The answer is “Not forever, and while there’s still no end in sight, things may be changing due to higher interest rates, high inflation and world wide economic uncertainty.”

Mortgage rates have risen over a full point in the last year, up from around 2.75% to approx 4% today. This is due in part to the Fed raising their rates once already, but more importantly, there are six more hikes coming this year alone. Read the full US News article here, but you already know the easy math: the higher the mortgage payment, the lesser the home value. But that doesn’t seem to matter anymore. Even with these higher mortgage rates, buyers continue to just shake it off and be thankful it’s not the 7% average their parents had. Who knows, going forward, but unless we have some unforeseen huge uptick in new listings, I for one see buying activity remaining very active in the next 3 months. After that, my crystal ball gets very foggy, but for now, think “hot” but not necessarily “boiling”. 

That pretty much does it. Enjoy April wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

Marin Market Marches on and Yes, All Those Stories Are True

March is here in Marin and what a first two months of the year we’ve had. A lot has happened nationwide and world wide, but this is a real estate blog, so let’s get right to that. As you see in the heading here, it’s just as crazy as you think it is and the stories you’re hearing are likely true. Honestly, you can’t know the half of it given you aren’t in my chair seven days a week, so you’re hearing just a fraction of what’s actually going on. Close to zero inventory, multiple multiple whopping over asking offers by 15 different buyers, you name it. All true with all the data to back it up as buyers from surrounding areas or transplants use whatever powers they have to move to Marin, or at least try. One of the questions you may have is, “When is it going to slowdown or stop”. The answer to that, as you probably know is, “We’ll have to wait and see, but no time soon”. Two reasons for that.

  1. With 15 offers on any given property, that still leaves 14 active buyers out there, cash in hand, loans ready to go (if a loan is needed at all) and no house to sell, only one needed to buy. Add to that list of 14 buyers a couple more who join the fray each week and you can see how the demand is being continually fueled and if the supply doesn’t keep in step and also go up, prices rise. 
  2. As with any major asset market, we don’t know where a bottom or top is until we’re passed it. In our case, that’s usually 6 months out. Things can start slowing over the course of 3 months, but a real, documentable slowdown doesn’t kick in until 6 full months of any trend. We don’t know where we are until we’re well passed were we’ve been.  

Going forward, there’s no doubt things are going to remain very active in the near term, well into Q2. If you read this blog regularly, you’ll see that as a departure from what the forecast was for January and February. We all thought we saw a slight cooling trend coming, but that never happened, not even close. Maybe it’s our unseasonable nice weather, the threat of higher mortgage rates, or the new importance of house becoming a real home to fully enjoy. But for now, the frenetic buying continues. Check in next month to see where we are. Should be very interesting. 

That pretty much does it. Enjoy March wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

January Jump in Home Sales and Values as the Sun Shines on Marin

February is here in Marin and while the rains of December and January abated, the buying of Marin real estate did not. Tahoe got dumped on with snow and our reservoirs got restocked with fresh water, but fresh inventory of homes in all areas was at the lowest I can recall in all my years of doing this. At one point last month, there were only 47 single family homes for sale in the entire county. It’s not much better today as that number is still less than a hundred at only 96. That’s in all price ranges. If you narrow it down to homes under $2 mil, there are only 49. Under $1 mil and there are only 10 houses to choose from in the entire county. Given the demand for East Bay and SF buyers who want to flee their cities for a safer, more tranquil environment, it’s hard to see how any homes are going to last in this market. We’ll see how long it continues.

Mortgage rates are set to start inching up further in March, so the big brains say. But they’re already up nearly a full point from a year ago and still, no slow down. Remember, it’s only early February. Our home buying season tends to start in the middle of this month, just after the Superbowl, but you wouldn’t know it. It’s busy as can be. 

I had a lot of comments on these figures from last year, so I wanted to print them again here. For the year in 2021:

  •      2075 single family homes were sold, down from 2312 in 2020
  •      The average sale price was $2,151,000, up 15% from $1,814,000
  •      (Note: 15% was also the national increase in average sales price for the country in 2021)
  •      Sale prices averaged 99% of asking price, though whopping over asking sales were frequent
  •      The average price per sq ft was $912 adjusted heavily for level land and condition, among others
  •      Average Days on Market was 28, but the median was only 14

Going forward, I still see a continued “up” market for 2022, though perhaps not as robust as 2021 or the last half of 2020 even. Think “hot” instead of “boiling”. For now, that pretty much does it. Enjoy February and this entire new year, wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

Lots of Fresh Water Brings a Fresh Beginning for a Great New Year in 2022

Wow. What a difference a month makes. Just thirty days ago I wrote a blog about the importance of rain and water for our county. It’s like somebody above was reading that as the skies opened up and boom! Rain for days, with over 40″ falling in December. That’s 220% of normal for that month and a start to filling our dry reservoirs here and throughout the state. We aren’t out of trouble just yet, but with more storms forecast even this week, we’re at least well on our way to a good, healthy winter of rain and Sierra snowpack. 

That’s looking ahead. Looking back and water woes aside, what a year it was for Marin real estate, along with much of the nation for that matter. For the year in 2021:

  •      2075 single family homes were sold, down from 2312 in 2020
  •      The average sale price was $2,151,000, up 15% from $1,814,000
  •      Sale prices averaged 99% of asking price, though whopping over asking sales were frequent
  •      The average price per sq ft was $912 adjusted heavily for level land and condition, among others
  •      Average Days on Market was 28, but the median was only 14

That’s where we’ve been. Now let’s see where we’re going. The answer is two simple words: Who knows. It used to be much easier to predict, looking at historical charts and economic headlines. That’s all different now, thanks to Covid. Home sales skyrocketed when we all were certain they would fall. Buyers moved when we all thought they would stay. Sellers relocated to new climates, whatever that looked like to them, but often out of their city, their neighborhood, or even out of California. Our population likely will remain flat at just under 40 million people, but the figures aren’t officially in yet. Still, considering how many residents we lost due to illness or old age, it’s a wonder we aren’t down significantly. 

If it matters, I for one see a continued “up” market for 2022, though perhaps not as robust as 2021 or the last half of 2020 even. The desire to live here is still astronomical and likely still exceeds what you think it is, but you aren’t able to see what we agents are. That would be the MLS field under “Sold” that indicates if there were Multiple Offers (Y/N) and if so how Many Offers there were. We saw some big numbers here throughout the year, as mentioned above, but we also saw it right through December, which is normally one of our two slowest months. The other being January. So go figure. We’ll see, but for now, who really knows. 

For now, that pretty much does it. Enjoy January and this entire new year, wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

Water and Homes For Sale Both in Short Supply

December is here in Marin and pretty much just one word on everyone’s mind these days. No, not Santa, not presents, but “water”. I agree we don’t have enough Santa and you can never have enough presents, but the common concern throughout Marin and the rest of the state is whether we’ll have enough water for our taps to flow well into 2022. Read any Bay Area or California newspaper and you’ll soon see an article about the lack of reservoir, lake or river water, no matter where you are. 

California is in our third year of drought, following years of light rain prior to that. So concerns about lack of water are everywhere and despite one whopper of a storm in late October, it’s been dry since, warm even. Marin has a reservoir system for our drinking water that’s 100% dependent on rainfall. So far those reservoirs are down 67% for this time last year and unless we get a lot of rain this winter, they’ll stay down well below capacity, resulting in even more water restrictions than we have now. But there are options.

The current plan is to invest $80m in a pipeline that runs under the Richmond/San Rafael bridge, bringing water from the Central Valley. That could work and in fact did work back in the early 80’s during the last major drought, only that time, the pipeline ran in the emergency lane of the bridge, next to the guardrail. Problem is, the Central Valley has its own drought problems to contend with and it’s unclear if there will be enough water to go around. 

A desalination plant was proposed, next to that same bridge on the Marin side with the cost of being only $35m, or less than half. A plant could also be leased, apparently, but of course the whole thing is stuck in political red tape. Meanwhile we hope and wait for more rain, much as homebuyers hope and wait for more inventory. 

Yes this is still a real estate blog, but the mantra remains the same here and in most parts of the state, much like the drought: not enough water or homes for sale and too many water users or homebuyers. Will that change this winter? We’ll see. Meanwhile I’ll stay in touch on my end with the drought and with housing. 

For now, that pretty much does it. Enjoy December and the rest of this year wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

Home Sales and Weather Both Cool, Is This an Early Start to the Winter Market?

It’s November already here in Marin and wow, where did the year go? One of my favorite Old Dominion songs has a line that goes, “Days will be long, but the years fly right on by.” Ain’t that the truth. One day your kids are celebrating their first birthday, the next they’re off to college. I heard about this “don’t blink” phenomenon many times, but didn’t really understand it, let alone believe it with my own eyes. Believe it, Ted, they really do grow up so quickly. Brooke is now a freshman at Cal Poly, Carson just 18 months to go at Redwood High. Luckily I had some foresight that all my friends and clients were telling the truth, so I was able to spend as much quality time with those two as I could. Thankfully. It’s a great life with kids and I am a better person today because of them. Proud parent doesn’t begin to touch how I feel most days. But I digress. This is a Marin real estate newsletter, yes, but people is what makes the world go ’round, as well as the housing market. Now to that.     

This month’s watchword: Change. Or make that Change? with a question mark as there’s some uncertainty if change is in the air. We’re seeing (or reading about) it nationwide as home sales slow and inventory finally starts to swell in middle America. Not so here in the Bay Area yet, or Marin specifically, but what happens in Iowa sometimes is a harbinger of what’s to come. The reasons are many and very familiar to those of us doing this for over three decades (I started when I was two): Rising interest rates, buyer fatigue, changing of the seasons, unrealistic sellers, you name it. All appear to be true today, with one new exception and perhaps our second watchword of the month: Zillow.  

Zillow is the largest online real estate company in the world and as you may know, they went offline and got into the home buying business back in April of 2018 with their Zillow Offers program. The plan was for Zillow to pay cash for the house, do any fix up needed, then spin off the house using a local agent. It didn’t go well, according to all published reports with the company losing an average of approx $100,000 on every house. Add this to a posted net loss of $162 million for 2020 and you wonder how this online enterprise can’t turn a profit on $3.339 billion in advertising revenue. Maybe it will be different for 2021 but if you didn’t make money on a real estate transaction in the last fifteen months–arguably the busiest in the history of most home resale markets–I doubt you’re going to make money at all.  

Where we go from here is unknown, though I do get asked all the time about the market in 2022. These are still unchartered waters for us as a county, a state and a nation, so much remains to be seen with the current or future pandemic(s) and how it impacts our work force which drives the economy, the stock market, interest rates and housing. I’ll stay in touch on my end with the housing. We’ll see how it goes with everything else. 

For now, that pretty much does it. Enjoy November and the rest of this year wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

Sales Drop But Prices Still Rise as Buyers Wait for More Inventory, or Are They Taking a Break?

October is here in Marin, one of our nicest weather months, no question. The last gasp of summer warmth fills each day as the season changes towards the end of the month, bringing cooler temps and–hopefully–normal seasonal rain. We need it as a county and not just to fill the reservoirs, but to quench the parched forests and undergrowth to avoid a repeat of a high risk fire season next year. We seem to be out of the woods (sorry) for now, but this is also the last month of awareness of that all too common natural threat.

Speaking of change, there’s a lot of news out there now on the housing market starting to slow, at least on the sales end. Price appreciation has slowed and stabilized, providing a good opportunity for patient buyers, but as of yet we haven’t seen any decline per se, only a drop in month over month price increases. I called this “normalizing” in the last newsletter and more normal it went, if you call our limited choice of housing options “normal” in any language. Buyers today have maybe one or two homes to look at in any area and any price range these days. While that sounds scant, at least it’s up from zero. In some cases they may have 2-3 homes to look at, though smart buyers aren’t picky and they don’t wait as multiple offers still abound, at least if the property tends to check a few major boxes on the common Wish List. That would be a one story home with at least 3 bedrooms, needing no updates on a flat lot in a good neighborhood with good weather, excellent schools, close to town, close to shops and not too far from the commute. At the right asking price, that house now sees 3-5 offers, which is also way down from the 10-12 they would have seen in our hot buying season of the spring. Not to say there isn’t plenty of demand for the privacy of view homes up in the hills, but given we are a county with only 25% flat ground, you can see how the supply issue works on those lots with most or all of the boxes checked for many buyers. 

Where we go from here is unknown, though I do get asked all the time about the market in 2022. These are still unchartered waters for us as a county, a state and a nation, so much remains to be seen with the current or future pandemic(s) and how it impacts our work force which drives the economy, the stock market, interest rates and housing. I’ll stay in touch on my end with the housing. We’ll see how it goes with everything else. 

For now, that pretty much does it. Enjoy October and the rest of this year wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

Twenty Months Later, a Tale of Two Economies Emerges

Fall is here in Marin, though as I write this the focus is on our friends in South Lake Tahoe and surrounding areas. Years of drought has left all forests and parks vulnerable to high fire danger, though few of us imagined it would be to the scope of what’s going on there right now. Let’s all hope that our hard working fire crews prevail and things can start returning to normal over time, though who knows what that will look like, literally. Kathryn and I have been on Highway 50 many times and we watch in dismay as our familiar road into Tahoe is engulfed in flames, wondering what will be left by the time we make our next trip back. All of us send our thoughts to everyone involved up there as we hope for the best. But let’s move forward here. 

Speaking of normal, there’s a lot of press out now about both the economy and the real estate market starting to “normalize”. As job loss numbers shrink and more people get back to work, so may also go home sales. After record home sales in areas and neighborhoods outside our major cities over the last twenty months, there may be a slow down coming. Not a significant drop in prices or sales, but a more normal market with increased inventory and more time for buyers to decide on their purchase. More than the current average of six days, anyway, and without having to go over the asking price for an average of 106%. That’s where we’ve been, but hopefully where we’re going is less frenetic, yet still fruitful for both buyer and seller. It takes both groups to make a real estate market and what a market they’ve made since March of 2020. That too has been unimaginable. 

What started out back then as a “certain drop off (if not a plummet)” in home buying, actually went in the exact opposite direction. That would be up. Dramatically. What’s more remarkable is that it went pretty much in the exact opposite direction of the economy, which started to go down. I just attended a webinar by Jordan Levine, a noted California Real Estate Economist and it was fascinating. He had clear charts and graphs, showing the economy going down, while home sales and prices rose over the last year +. But as more people went back to work and the economy improved, the upward trajectory of home sales and prices started to soften with more inventory, fewer bidding wars and less of the over-asking price spikes. Read those words carefully, mind you. There’s nothing dramatic going on here right now with the economy or housing, only a slight shift in trends for both. Where we go from here is anybody’s guess, but I for one would like to see a more balanced (read: normal) housing market going forward, one that is neutral, favoring neither buyer nor seller. We’ll see.   

Meanwhile, you’ve all likely seen the published numbers or stayed in touch with an agent in your neighborhood, but virtually all home types and price ranges are up nationwide. They certainly are countywide here though not nearly the 20%-25% we’ve read about in some areas. Closer to 15%. Marin tends to have some of the higher prices in the nation with a median home price now at $1.8 mil and an average close to $2 mil, far from the approx $350k we see on average in most of the country, so that limits those who can afford the quality of life that many tend to strive for. Who knows where we go from there though. The times they may be a changing, yes, but people gotta live somewhere as they say and with interest rates these cheap, why not trade up, down or sideways.   

For now, that pretty much does it. Enjoy September and the rest of this year wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com