The velocity of transactions has slowed in recent years both in terms of actual unit sales, but also in terms of how buyers research, visit and negotiate for homes.  Additionally, the market now moves in fits and starts. There are long lulls between “flurries” of buying activity. This off-again, on-again nature of demand for homes in Marin is coincidental with normal seasonal activity—where more deals are closed during the strong Spring market, and an uptick of sales in the Fall. The “off” patterns seem to generally track downside volatility in stock market indexes; Patterns of buying activity are not-correlated with stocks nor interest rates.

Buyers won’t submit offers unless the home is a “compelling value”-- price continues to drive sales. Homes need to be aggressively priced to sell during a “flurry” of buying activity—if you aren’t properly priced and you miss a “flurry” you’ll have to wait until the next one which, if the past is any indication—will be several months away; or if the home is over $4m could be many months away.

As of the preparation of this report on Dec. 1st, 27% of the homes currently on the market  on S. Marin were in contract. This is indicative of a healthy real estate market—buyers and sellers are agreeing to prices en-mass. Very similar to last year, this late-season flurry of deals occurred closer to Thanksgiving than Halloween.  The largest difference from last year is the lack of high end deals that statistically “saved”  2010 from being a poor year- particularly for Tiburon & Belvedere prices which are more affected by a few, missing high-end sales.

The biggest statistical change in 2011: Tiburon & Belvedere are both having tough years with average prices down near 20% from ‘10. This is the 3rd -20%+ year for Belvedere since 1960 (’91, ‘09, ’11).
The good news is that San Francisco leads the country in job creation (+15% from trough) so home sales and prices should marginally improve thru Spring  2012 (65% likelihood*). The caveat: if the EU unravels and the financial ‘contagion’ spreads to the US it will force us back into recession (30% likelihood*). *Forecast % by economist Ken Rosen