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Ted Strodder


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

“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