2016 brought a new high water mark for Marin County home prices- now 12.5% above the previous cycle peak in ’07. Buyers burst out of the gate unusually hot in the early Spring and then disengaged earlier than normal in May/June. The rest of the summer & fall was similarly lackluster especially in the mid/higher mkt segment due to uncertainty with the election and the business cycle. Of 60 buyer parties thru our quintessential Mill Valley fall listing- 2/3 were over the age of 60. Highly unusual! Many younger buyer families delayed purchasing which is a harbinger of stronger demand this coming spring ‘17.
The annual Marin County real estate bull market cycle shows relative strength in the low/mid-market early in the first half of the year (school admissions the catalyst), while at the end of year the high-end usually pops (with visibility into the next year’s biz pipeline driving sales). This newsletter was compiled 11/25/16, so dust hasn’t fully settled.
Marin home prices are inherently cyclical- a function of local jobs and the level of interest rates. Since ‘79 Marin County home prices average 122% higher than the average of the last 7 years, or 1 standard business cycle—which is exactly where home prices are now relative to the last 7 year cycle. Home prices would have to rise 6.5% in 2017 to stay at this 122% level.
Tiburon Real Estate continues to struggle with median prices down 20% since ’14. In 2014- the average size home that sold in Tiburon was 3,500sqft and this year average home size is just over 3,000sqft. Similar trend for Belvedere-the average sale price in 2015 was over $6m and the average size house that sold was 3,949sqft. This year (’16) the average size home sold in Belvedere was 2,876sqft and the average sale price is $3.5m. Our ‘TDG Price Index’ incorporates home size, lot values and structure values- all of the town pricing data on the following pages is ‘TDG Price Index’. Most other Marin towns witnessed a slow and steady climb in home prices although the rate of price increases is slowing, with the exception of Larkspur which had its best year since 2013.
President elect Trump’s privatized infra-structure spending plan promises to deliver profits for wall street and jobs for main street. Pundits are warning about rising interest rates which would affect mortgages, affordability & home prices. More troubling is combination of SF budget shortfall & Trump’s conservative agenda- such as his threats to cut funding to cities with a ‘Sanctuary’ policy of not aiding immigration agents. 1 in 8 Americans live in CA; CA is the world’s 6th largest economy; and the CA presidential vote was a landslide for Clinton. The next 4 years may prove contentious between the Golden State and the White house, which may impact federal grants & funding in CA.