Real Estate Market News
A collection of articles and announcements on the Marin County Luxury Real Estate Market and the greater real estate market's affect on local Belvedere and Tiburon real estate.
2007 Review and 2008 Market Report (3/1/08)
How To Sell Homes Quickly (1/20/08)
How Buyers Find Your Property in Today’s Market (9/19/07)
What's Ahead For Our Market? (8/8/07)
’07 Market Report Snapshot
In the $2M to $5M segment in Marin, 2007 was a steady to up year, quite contrary to what the newspapers reported. As compared to 2006, the data for 2007 shows:
• The sales rate slightly rose in 2007 to 21.5 sales/month as compared to 20.3 sales/month in 2006.
• The average sales price increased slightly from $2.75M in 2006 to $2.86M in 2007, just over 4 percent.
• It took about the same to sell property: 81 days on average in 2007 as compared to 80 days in 2006.
Most importantly, the average dollar per square foot value of sold properties increased from $821/sf in 2006 to $870/sf in 2007, or about 6%. The media would have one believe values have declined, but that is not true.
How is 2008 Doing?
So far this year, we have had 39 properties in contract, 26 of which have closed. This early bird activity suggests that the spring market will be quite active. Moreover, we are beginning to see active open houses, and I believe this is a reflection of the beginning of another activity and value increase. (See the thoughts below about our Ten Year Real Estate Cycle.)
If you or someone you know wants to sell, please call me so I can provide a free market evaluation and share how our marketing programs create success. I’m always busy, but never too busy for your referrals. Call me direct at 415.531.2656.
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How To Sell Homes Quickly?
Three reasons:
• Pricing
• Positioning
• PresentationPricing is key. The closer a home is listed to market value, the higher the probability that it will sell quickly. Research indicates that a home should be listed no more than 5% above what the market determines its worth to be. This home was priced well.
Positioning relates to how a property compares to other similar properties also on the market. The idea is for your property to have an advantage over one’s rivals in a competitive situation. Buyers look at all the available properties and the one that is priced best and compares most favorably to its competition receives the most attention. This home was positioned against its competition very well.
Presentation is how it looks to buyers. This home had been on the market last fall with no attention given to showing its outstanding features. We changed that by completing repairs, updating the kitchen and baths, removal of worn-out items that got in the way of buyers seeing what a great property it is, and landscaping so it became appealing. And an appealing product does just that, it is appealing.
So there it is… Pricing, Positioning, and Presentation. Call us, we know how to sell well. And are nice to work with too.
David Kirchhoff, fne homes 531-2656 direct
How Buyers Find Your Property
in Today’s Market
I can’t believe how much real estate has changed in the past 20 years. When I first got in the business, we spent a lot of time driving buyers around looking at homes. And when representing sellers, print media was the principal outreach medium used to reach buyers.
Now, I don’t drive buyers around, we meet at the property. And, print media is so hampered by the lead time lapse from initiation to publication that typically the property is gone before the print ad hits the street.
So what’s happening? It’s the internet. Buying and selling patterns have fundamentally changed, particularly in the more sophisticated markets where computer savvy is a given characteristic of the demographics.
The truth is that buyers don’t want to spend their time being driven around by a realtor. They prefer looking for properties in the comfort of their homes or offices. And, in the past ten years, internet growth and user friendly web sites have created just such an opportunity for buyers to rely on the web as their fundamental search vehicle.
This pattern is so significant that, by last count, 81% of buyers first saw the home they bought on a website like www.realtor.com which lists every home on multiple listing services nationwide. For example, my wife and I recently helped our daughter and son-in-law buy an investment property in Fort Collins, CO and, despite never being there, we pulled up all the current listings, saw photos & maps on the web and were able to see comparable sales and listings for our value analysis. Does this mean that realtors are irrelevant? Absolutely not – the better realtors know value and can be skilled negotiators. After buyers find a property they find interesting, their first call should be to that skilled realtor as these professionals make their living from their nuanced knowledge about neighborhoods, schools, locations, values, the trends driving values and otherwise politically incorrect information so important to buyers. And their negotiation skills can have generous pay-backs.
So the patterns have changed as buyers are not reading the print ads as much and have shifted to the internet to find property. Sellers need to understand this when selecting listing agents. Selecting an agent who understands this changed dynamic and who has a marketing program addressing this new real estate marketing paradigm will dramatically increase exposure of their property. One of our successes demonstrates this point vividly. We recently got a listing that two very successful agents had listed off and on for the past five years. Neither sold it through conventional marketing and the listing became stale. We implemented a marketing program exploiting the new realities of marketing, made sure it got out to the world through the internet, and sold it in less than six months. The buyer lived in another state, and, upon seeing our multimedia presentation on the net, flew out one weekend to see the property firsthand, flew out with her husband the following weekend then went right into contract.
Real estate has changed. If you are ready to sell, call me so I can design a custom marketing program for your property including a vibrant internet element to take advantage of this new way buyers are finding properties today. Back to top
What’s Ahead For Our Market?
In a few words, our market is strong with little inventory. But shhhh…don’t tell the media as it won’t fit into their glass half-empty mentality.
We Live in an Enclave Market - great schools, great weather, great housing product, great communities, great convenience, plus gorgeous views. Even if you don’t have a view, just driving down Tiburon Blvd. can make your day. And, we only have a few homes – 2500 or so in Tiburon and just over 1000 in Belvedere.
Interestingly, enclave markets are typically defined by their barriers. In our case, the principal entry barrier is the cost to play. Tiburon Peninsula entry level generally starts at $1M and in Belvedere, even higher. So what does this mean? Simply said, more people want to live here than we have room for. And that sustains value.
Inventories are Low - Current inventories are low, very low. In the past three months in the Belvedere-Tiburon zip code we had 65 transactions, about 22 per month. Given 58 current listings, this means we have less than three months inventory, a vivid indication of our market strength. So, if you want to sell, now is an excellent time.
Correct Pricing Works - Another interesting facet of our market is the difference between the average listing price and days on market for homes currently listed compared to those homes that sold.
For listings, average $/SqFt value is $1,080/SqFt and average days on market is 118 days. For homes sold in the past three months or currently in escrow, average list price is $901/SqFt compared to an average sale price of $865/SqFt (only a four percent spread) and average marketing time of 89 days. Since 30 to 45 days was likely part of the escrow period after the price was agreed upon, this suggests correctly priced homes went into contract in only 45-60 days and affirms the value of correct pricing. Just as importantly, it affirms that properties move in 60 days if priced correctly, far less than the 118 days that unsold inventory has been sitting.
Incorrect Pricing Means Not Selling - Now, let’s look at pricing of unsold listings. On average, these properties are listed 25% over the sale prices of the sold homes ($1,080/sf divided by $865/sf = 125%.) Listing a home twenty five percent over market value translates to no offers and almost four months without selling. That’s four months sitting versus two months that correctly priced homes needed to sell.
What is the Recipe for Success? - Remember - Pricing, Presentation and Positioning - these are the keys to selling your home. Needless to say, we know how to do this. Our success speaks for itself.
What Should You Do? - When you want to sell your home, please remember this: we like what we do, we know what we’re doing, and we are here to help you sell your home – effectively and efficiently. It’s called the art of real estate.
Call me at 435-6991 for a no obligation market evaluation and marketing plan that will get your home sold. Back to top
