Welcome to my April 2018 Marin County Real Estate Market Report! This month one number really stands out: We saw 44% fewer new home listings in Marin County in March 2018 compared to March 2017. The housing inventory crisis that is plaguing the country has not spared Marin. At the same time, we are seeing prices increase, with the median sold price up 24.4% versus March 2017. The average sold price, which is affected by the percentage of homes at different price points on the market and more subject to skewing by pricing outliers (high or low), decreased by 3.1%. Please scroll down to see the charts with all the numbers.

So what gives? Normally I see a lot of homes hit MLS and my Top Agent Network feed each week this time of year, but in 2018 it is more of a trickle. Some are blaming it on a colder and longer winter than usual. (I still haven’t planted my tomatoes, and usually they are in the ground by now.) Others point to a stock market that has been extremely volatile in recent months (read more about this, below). The California Association of Realtors has one idea to help encourage those over 55 to move (more below). Whatever the cause is, the numbers speak for themselves and the environment is very challenging for buyers who want to get settled before school begins in the fall.

I am fortunate enough to have several listings coming up, with two in Greenbrae preparing to launch, one in San Anselmo, and several in San Rafael. If you are a buyer looking for a home, please call me and I will turn over every stone to find your dream home for you. Right now, I am seeing more homes sell without even going on the market. I looked at a gorgeous home on Rock Road in Kentfield that was staged and ready to hit MLS, but was never seen by the public because it sold over asking as top Marin real estate agents previewed it for their clients.

If you are a buyer looking only at online portals such as Redfin or Zillow, and not working with a well-connected agent, you’re not seeing all of the homes available in Marin County.

The California Property Tax Initiative

Did you know that nearly three-quarters of homeowners 55 years of age or older have not moved since 2000? The current property tax structure in California effectively discourages many from downsizing later in life as they may be faced with property tax increases of 100-300 percent if they move.

The California Association of Realtors has a proposal to solve this, and it will be on the November ballot. It is called the California Property Tax Initiative, and would allow homeowners 55 years of age or older to transfer their Proposition 13 tax base to a home of any price, located anywhere in the state, any
number of times. These protections would also be extended to people who are disabled (“differently abled”) and to those who have lost their homes to a natural disaster. They say it’s a carefully written initiative that includes appropriate safeguards while eliminating California’s property tax “moving penalty.”

You can read more about this idea, along with arguments against it, in this recent article on Realtor.com.

We are sure to hear more about this initiative between now and November 2018, but the theory is by allowing people over 55 to take their low property tax rate with them when they move, we will see more housing inventory in California as seniors move out of homes that no longer suit them. What do you think of this idea? Please add your comments in the comments section at the bottom of this article.

Rising Interest Rates and a Volatile Stock Market

The story this month is the impact of rising interest rates on the local and national housing market. Fannie Mae Chief Economist Doug Duncan recently raised his year-end 2018 mortgage rate forecast from 4% to 4.4%. As he did this, he said, ““However we don’t expect rates to play much of a role in total home sales, especially with anticipated stronger disposable household income growth.”

Some economists are forecasting mortgage rates at 5% by the end of the year. Crossing the 5% threshold could have a significant impact on both housing affordability and buyer sentiment.

You may wish to read these recent articles about the impact of rising mortgage rates:

Mortgage Rates Will Spike Faster, Higher Than Originally Projected

Is It Last Call for Low Mortgage Rates? Why Home Buyers Should Act Now

With Home Prices and Interest Rates Rising, How Much Could Mortgage Bills Grow?

The “Wait and See” Market Approach

In addition, the stock market has experienced volatility not seen since the mortgage crisis 10+ years ago. The week of March 18th alone the stock market declined by 1400 points. Economists remind us that these large point swings, while concerning, are smaller percentage declines given the market’s heights.

I am not an economist, but I am hearing more friends and clients say they are going to “wait and see” what the market does before making any large moves. This “wait and see” approach could be one of the factors that is driving the lower housing inventory in 2018 versus 2017. If we do see a full-fledged market correction take hold, we could see an influx of housing inventory as sellers decide to sell before further declines.

As I always say, my crystal ball is at the cleaners, but I thought I would share some of what I am reading with you. How are you feeling about the current market? Please feel free to leave your thoughts in the comments section at the bottom of this article.

These market reports are a great place to start — but let’s continue the conversation. Call me at 415-847-5584 and I can provide you with a personalized market overview tailored to your specific situation.