May Day For Buyers As Multiple Offers Abound, Market Moves Up

It’s mid season for our home buying market and we’re in the thick of it here, no question. Qualified buyers are out in force, well aware of further appreciation to come and not wanting to be left behind. The media frequently updates us on the rising population of California, a statistic that is sure to bring further interest by many to enjoy the high quality of life that Marin County is known for. Given our zero-growth mantra, you don’t need a calculator to figure out that the price of the supply is going to only slowly increase with the equally growing demand.

The turnout from my first Broker’s Open on this new listing last week. Note how many color flyers are left, on the right. And we always start with 100.

That increase is far from an exact science, however, at least to the untrained eye. When valuing a property, a number of factors are taken into consideration. But at the end of the day, and at the start of the marketing period by going on MLS, many experienced agents choose the safe tactic of “under pricing” to determine “market value pricing”. This helps us not only get the highest and best outcome for any seller, it also helps us gauge the strength of the market going forward: either for our next listing or for the buyers we may be working with now or in the near future. Here’s how.

Every serious seller wants to know the level of activity on their home before they go on the market. This can be difficult to determine and is far from the price-per-square-foot formula used in sprawling cities like Phoenix or Las Vegas. With so few housing developments here in Marin, home values in any given neighborhood are eclectic, to say the least. Many identical sized homes on the same street can vary greatly in value and be over a million dollars apart, due to a number of factors.

Our county is 75% hillside, so level land is at a premium right off the bat. With our temperate climate, many of our residents choose to walk instead of drive to shops, parks and schools, making the close-to-town locations the most popular place to be for some, but certainly not all. Four bedrooms remain to be highly desirable over three and on top of that, the aging population prefers a one story home with few stairs, if any. They too, then, are the most sought-after. But very few homes have all of these value factors in place, or if they do, it’s a hob knob combination that varies widely, mostly due to my three L’s: Lot, Location and Layout, discussed frequently in this blog. So with all of this, what’s a seller to do when it comes to figuring out their home value?

The reality is, we can all only get close, at best, when figuring out value. Sure we look at nearby sales, but those are likely to be skewed up or down by a plethora (or absence) of those factors discussed above. With the sellers’ permission, many agents choose the safe route: often under pricing a property rather than the risky route of over pricing. There’s a saying here that the buyers set the value, not the sellers or the agent. All we can do is get close and let the market respond from there. The level of that response lets those smart sellers know exactly the level of buyer activity is on their home, with the resulting offer(s) being the ultimate determination of that value. It also let’s agents in tune with that market segment know exactly what the buying interest is for the next listing. If that agent doesn’t know that the last sale received five offers after it goes into escrow, they will once it posts as Sold. The MLS now has a field that indicates whether or not Multiple Offers were received and if so, how many. This is good to know. In this case, there would be four buyers still out looking with cash in hand, ready to buy. Likely they would be joined by another buyer or two and the resulting sale would then be a good guide as to the value of the very next similar listing to come along. Sound confusing? Try doing it every day throughout any of our twelve towns. Thankfully, there’s wine on weekends.

Speaking of which, if you haven’t tried it, the 2012 River Road Zinfandel is worth a taste. Less than $20 and it received 91 points as a Best Buy in Wine and Spirits magazine!

Any questions or help I can provide, I’m here for you.
Enjoy May and all of 2015, wherever you are. As always, feel free to text, email or just call me up. I’m always around.

Ted

415.377.5222 c
ted@gomarin.com

Filed under: Marin Real Estate Blog by Ted Strodder