The most challenging aspect of the slowed-down real estate market is dealing with people’s perceptions. Sellers still refuse to believe their homes are not worth quite as much as they were a  few years ago and buyers believe there  are free-falling prices. Both have a kernal of truth to them but both are blurred by their perception of reality. The SF Chroncle published a very good article regarding real estate perceptions. Check it out.

What an interesting, challenging and fun time to be a Realtor®! Fun? That’s correct. Remember, those of us who love this business got into it for one reason and one reason only. That reason is to help people. Now, that may sound like complete BS but, sorry, it’s true. We are at a point in real estate when there are a lot of people who need our help. Anyone who got their real estate license to make lots of quick cash, work a little and only when you want to, or for of the wrong reasons, must be very disappointed. Actually, most of those types are no longer in the business or are planning their exit from the business as I write this. As a matter of fact, California Association of Realtors has lost about 11% of its membership from 6/30/2007 to 6/30/2008, while nationally there has been a loss of about 6.1% and there will be many more to follow.

These days we have to be friend, foe and psychoanalyst to our clients  and it’s great. It’s such a pleasure when you can advise people in ways they haven’t yet heard and give them some relief from their worries. There is so much stress, anger, disappointment and confusion amongst home sellers and buyers that it’s a great feeling to give helpful counseling and to have a positive impact on them.

As they say, every cloud has a silver lining  and our silver lining in this cloudy real estate market is the great satisfaction we derive from helping our clients.

 In my last entry I said I believe Marin has seen the bottom of the housing slump and is starting its slow climb back to a healthy market. It’s interesting what we think a healthy real estate market is. After the blazing last five years of real estate sales we tend to lose a bit of perspective as to what exactly is a healthy market. Historically, in most parts of the country a 6 - 8 month stock of housing inventory indicates a healthy market. Currently Marin has just over 5 months inventory of single family homes, making our current housing market stronger than most areas at their strongest. One thing areas like Phoenix and Las Vegas do not have is intrinsic value. They have miles and miles of cheap dirt where thousands upon thousands of homes can be built, subdivision by subdivision, with no intrinsic value at all. Each new subdivision squashing the home prices of the subdivisions that came before. Certainly not the story in Marin.

Unfortunately, with the year’s 2^nd quarter reports the recent news has been pretty negative, the latest being the closing of IndyMac, the nation’s second largest wholesale lender, and the concerns with Fannie Mae and Freddie Mac .

Rest assured that we’ll be hearing negative news for the balance of the year but remember that “real estate is a local business” and, as I said in my last entry, our local market is definitely on the mend.

While the Marin’s single family home resale market is down approximately 30% from last year and prices (average square foot price) are down almost 5% the condominium market has been hit a bit harder.  Currently here are 302 active condominiums for sale throughout Marin County. For the period January 1 through June 30, 2007, Marin has 291 condo sales. This year we’ve seen 183 sales representing a 37% drop in volume over the same6 month period of 2007. The average square foot price is down almost 14% ($481.70 in 2007 vs. 416.91 in 2008).All but two towns, Larkspur 11.2% up and Mill Valley 1.6% up, have seen drops in the average square foot price of condos: Corte Madera down 11.8%; Fairfax down 3.4%; Greenbrae down 7.9%; Novato down 19.8%;San Anselmo down 12.1%; San Rafael down 5.4%; Sausalito prices are flat; Stinson Beach has had no condo sales this year; Tiburon down 9.5%.

The good news is that some of these towns now have fantastic opportunities for anyone in the market for condominiums. The selection is strong and the prices are soft. What better time for buyers to take advantage of this opportunity.

Lastly, I’d like to take a moment to introduce you to a very lovely 2005 Pinot Noir. Released by R. Buoncristiani Vineyard in Sebastopol, Orentano Pinot Noir has an earthy aroma and fruity bouquet that makes this a special wine for any occasion. If you like Pinot Noir you’ll love this vintage. Ask for it at fine restaurants and local wine shops.

The question I’m being asked most is “have we hit bottom yet?” That’s an interesting and complex question. If we weren’t living in the Bay Area my quick response would be “no, we have not”. 

Working real estate in the Bay Area and more specifically in Marin County the answer needs a bit more analysis. Most analysts gauge the strength of a real estate market by the number of sales (volume) and the average square foot price of the homes being sold. In the Bay Area the highest volume and the highest square foot prices were recorded in August 2005. There have been decreases in either or both volume and square foot price every month since.

The good news for Marin is that although down almost 30% in volume and approximately 5% in average square foot price we have been seeing a steady increase in the volume of single family homes being sold. There has been an increase each and every month of 2008. Many areas in California and throughout the nation have watched as home prices dropped 20%-50% and volume down 50% or more with no end in sight. Not only are single family prices in Marin remaining strong, but as I mentioned, we are now seeing steady increases in sales volume. Here are the numbers of single family home sales since January 1, 2008:

            January             83 sales

            February           93 sales

            March             105 sales

            April               148 sales

            May                167 sales

Once we record 6-9 months of continually increasing sales we’ll know that we are climbing out of the housing slump. Once sales volume grows at that steady rate we will once again see pressure on home prices and the beginning of a healthy, more balanced real estate market.

So, to answer the question, “do I think Marin has seen the bottom of the housing correction?”  My answer is “yes, we are seeing all the signs that indicate we have”.

 Discount real estate brokerages are now part of the real estate landscape. I think a well-run brokerage with experienced agents, which can offer its clients all the services necessary, especially in a market such as we are currently in, and do so at a discount to the client is great for the consumer. It serves to keep commissions and Realtor services competitive. That’s the theory. Let’s talk reality.

I recently oversaw a transaction in my office in which we represented the sellers and Redfin, a discount brokerage, represented the buyer. I have to tell you that as a broker I was stunned at the lack of service, counseling and support the Redfin agent provided his/her “client”. What a disgrace. As a Realtor/broker who takes pride in the service I and my agents provide our clients, I was appalled at Redfin’s lack of involvement and motivation. The agent did not accompany his client to the home inspections. He did not counsel the buyer through the transaction. He was woefully lacking in communication with the client and with the listing agent. The buyer, working without the support and guidance needed, got “buyers remorse” and cancelled the deal. Did I mention she has done this a number of times in the past with ‘guess who as agent’? That’s right, Redfin.

There’s an old saying - “you get what you pay for”. Ain’t it the truth. It seems incredible to me that a person who is willing to pay hundreds of thousands, even millions of dollars for a home will cut corners when it comes to hiring the professional who can guide them through the complexities of home buying (or selling), who can council them with their years of real estate experience and who can ultimately save them much more money with their negotiating skills than they will ever save by “shaving the commission” and using an unmotivated, salaried real estate agent .

There’s another old saying that aptly applies, “buyer beware”.

 I’ve gotten no less than 4 calls in the last week from friends and clients asking why their lender has notified them that their home equity line of credit has been “frozen”. In other words, it no longer is available to the borrower. Ouch!  

Freezing home equity loans in areas of declining property values makes sense. Why would a lender loan on a property where the equity has shrunk or disappeared altogether? That’s understandable. However, Marin County is not yet designated as having declining property values. That’s not to say it won’t happen, just that it hasn’t yet happened. Lenders use sales and price statistics to determine whether a county is “in decline” and from the lenders and appraisers I’ve spoken with Marin prices are, generally speaking, still stable.

If you have an equity line that you think you’ll use in the future my advice is to take the money now. Deposit it in a CD or somewhere you can get 3-4% return. If you’re paying 6% for the home equity loan it might be worth the 2-3% cost to keep those funds available to you.

If your equity line has already been frozen it might make sense to talk to a mortgage broker  about a getting a 2^nd loan on your home for the amount you want.

Memorial Day Weekend! Boy, it’s arrived early this year, making the “where’s the year going” affect even more intense. At my age the saying “time flies” applies more than ever before and, unlike the other part of the saying, it’s flying whether or not a good time is involved All kidding aside, have a fun, relaxed and safe Memorial Day weekend.

In the market to buy a condominium? It’s certainly something to think about if you’re a renter or an investor. The demand for rentals is increasing and rents are going up. With condo prices decreasing there are some great deals to be had. Typically when a real estate market is in decline condominiums are the first to lose value, and as you can see from the information below, almost every town has seen a decrease in the average price per square foot:

                                $/sq. ft.                   $/sq. ft.
Town                       2007                  2008 (thru 5/22)      % Change

Corte Madera         $474.75                         $405.52                       - 14.5
Greenbrae               497.71                           472.97                       -   5.0
Larkspur                  513.54                           587.21                       - 12.6
Mill Valley                592.26                           604.25                       +  2.0
Novato                    359.08                           295.17                       - 17.8
San Rafael               422.18                           343.35                       - 18.7
Sausalito                  553.07                           570.11                      +  3.1
Tiburon                    725.80                           693.07                       -  4.5

The 2008 square foot prices listed above very closely reflect 2003-2004 values. These “rolled-back” values coupled with the still incredibly low mortgage interest rates make condominiums a very appealing purchase.

The Marin Associates of Realtors strongly opposes the proposed spraying for the apple moth. If you are opposed to the spraying please participate and make your voice heard.

In the current real estate market, proper pricing is the most effective marketing strategy. Here is an example of how effective pricing minimizes days on the market (the Multiple Listing Service defines “Days on Market” as the time it takes for a home to be free of buyer contingencies and ready to close escrow). As of May 15, Marin County had 899 active single family homes for sale. During the month of April there were 147 single family home sales. If you take a “snapshot” of that data you’ll see there is about 6.1 months of inventory available. (To determine the amount of inventory take the current inventory and divide that number by the previous month’s sales volume - Total Available Homes/Previous Month’s Number of Sales —899/147 = 6.1.) 

The reason for sluggish sales and rising home inventory is that many homes available are priced too high for today’s market.  David Lionhardt wrote a great article in the New York Times about home pricing. Check it out. In this market you need to attract buyers “right out of the gate”.  Homes on the market for longer than 30 days are considered “stale” and are passed over for the new inventory coming on the market daily. Once determined stale by the market the only way you can attempt to re-interest buyers in your property is to reduce the price. Unfortunately that sets you up for selling your property for less than you would have had it come on the market priced correctly.

Here’s an example of days on the market and how it affects sales price.

Since January 1, 2008 in Marin homes that were on the market for:

1 - 30 days saw 100.41% of listing price
31 - 120 days saw 95.14% of listing price
121 and over days saw 91.81% of listing price

Generally, the longer a home stays on the market the less it sells for.

If you’re going to sell your home in today’s real estate market, do yourself a favor - let the facts and figures guide you, not what your best friend says your house is worth or what your neighbor sold their home for last year, etc. If you price intelligently you will find that this isn’t such a bad market after all. Unfortunately most of the pain is self-inflicted and avoidable in many cases.

Did you know that as of May 12, 2008 your cell phone can be contacted by telemarketers and other sales calls. Register  here to avoid sales calls to your cell phone.

Tired of all those unwanted catalogs jamming your mailbox? Check out catalog choice #1  OR catalog choice #2.

How’s the market? I get asked that all the time and only wish I had a pat answer for it. In fact, there are many different markets within our Marin real estate market. There is the entry-level market, the step-up market, the luxury market, the condo market, the muti-unit market, the southern Marin market, etc. You get the point. It would be unfair and misleading to lump all of those components into one sound bite answer. I can tell you that all of the very negative and pessimistic news you’re reading about real estate in general down not really apply to Marin County. Loan defaults and foreclosures are the big news items. Look at Marin’s figures. Sure there has been an increase in Notice of Defaults and foreclosures but the amount, objectively speaking, is miniscule in relations to other parts of California and the country.

Now (Spring, 2008) is the time of the year we in real estate call “the season”. This is the time we historically sell the bulk of properties in Marin. It is an especially important time to see how our real estate market will perform in 2008. We’ve all been reading negative reports about our market. Quite frankly, it’s a matter of reporting whether the “glass is half filled or half empty”. There are very positive aspects to our current market. Also, we are also seeing some necessary price corrections, this market is weeding out “buyers” who really don’t financially qualify (no more 100% financing, thank goodness). Let me give you a few examples of positive news relating to our market: the number of Single Family Homes sold has increased 44.5% from January ‘08 to April ‘8.

Here is a sampling of price performance for single family homes since January 1, 2008:

56% of Corte Madera sales have been overbids
29% of Greenbrae sales have been overbids
14% of Kentfield sales have been overbids
20% of Larkspur sales have been overbids
21% of Mill Valley sales have been overbids
9% of San Anselmo sales have been overbids
15% of San Rafael sales have been overbids
33% of Tiburon sales have been overbids

You may very well ask yourself why this news isn’t being reported.

Sometimes it may seem like it but life does not entirely revolve around real estate. I recently had lunch with a friend and client of mine named Rita Lakin. Rita wrote for television in the Golden Years of Television and is an accomplished author. She is currently writing the “Getting Old…” series of fun murder mysteries. The books are fun to read, witty and playful. They’re perfect summer reading and make getting older fun (so you know its fiction) and that alone is worth their price. Be sure to check Rita’s web site.

Another friend and client, Jeromy Zajonc, just produced a new movie based and shot in Marin and starring the very excellent actor, Ed Harris. Word from people who work in “the biz” is that Mr. Harris turned in one of the best performances of his career. Wow! The story was written by Logan and Noah Miller (the Miller Bros.) and is based on their father who lived in Marin but did so quite unlike the typical Marinite. The film was chosen to premier at this year’s San Francisco International Film Festival and we are thrilled to have tickets for the premier. So keep on the lookout and make sure to see it out when you can. Check out the Miller brothers and Ed Harris interview on YouTube.

Rita and Jeromy are just two of the many talented and fascinating people who live in Marin. Just one more reason why Marin is such an interesting, exciting and beautiful place to live.

Last but not least a big thanks and congratulations to all the talented performers who contributed their time and talent for the incredible performance of ‘Carmina Burana’ at the Marin Center. Bravo!