Please see our UPDATED separate market report pages for the North Bay real estate markets:
Marin County Real Estate Market Report
Sonoma County Real Estate Market Report
Classic Low Supply & High Demand Dynamic Leads to Increasing Prices
2013 Brings Further Acceleration to North Bay Homes Market
The Paragon North Bay Report
The equation: Add the repressed home-buyer demand that builds up during the years of an economic downturn to an improving economy, incredibly low interest rates and rising rents, and you get surging buyer demand. Take that increasing demand and mix it with an extremely low inventory of homes available to purchase, and you get strong upward pressure on prices. This dynamic reflects exactly what is happening now in the Marin, Napa and Sonoma home markets.
As one can see in the first info-graphic below, comparing the 1st quarter of 2013 to the 1st quarter of 2012, overall median sales prices in the 3 North Bay counties, as well as in San Francisco, have gone up in the 20% - 25% range. This reflects both the turnaround in 2012 as well as the increasing acceleration in price appreciation we've seen so far in 2013. These percentages are generalities: a variety of factors can affect these statistics (besides changes in value), and these counties all contain micro markets of widely different qualities and prices. But the upward trend is clear virtually everywhere.
For what it’s worth, the real estate website Zillow has recently predicted further price increases here of up to 10 to 13% in 2013. Right now, that's looking like a low estimate considering the heat of the current market.
If you adjust your screenview to Zoom 125%, the charts below will be that much easier to read. On Windows systems that can be achieved by pressing the Control and + keys simultaneously.
Percentage Change in Median Home Prices
Median North Bay House Prices
This mapped analysis will be updated once we're a bit further into 2013 and we have more months of data: 2013 has definitely been experiencing further price appreciation. Still, these prices from the last four to six months of 2012 give a good idea of comparative home prices in the different towns and cities of Marin, Napa and Sonoma.
Median Home Price Appreciation Trends
The price trend lines started moving up in early 2012 with the general market recovery around the Bay Area, the state and the country.
Percentages of Home Sales Over, Under & At Original List Price
As the market gets hotter, the most appealing and well-priced listings attract competitive offers and the percentage of sales occurring over asking price increases. However, many new listings are still overpriced in the market's opinion and thus sell for less, and sometimes much less, than the asking price, often subsequent to one or more price reductions.
Sales by Price Range
There is a huge range of home values in these 3 counties: the majority sells for below $500,000, but sales prices range up to over $10 million. The greatest number of sales occurs in Sonoma.
Home Values by County
Last updated as of the 4th quarter of 2012.
Of the 3 North Bay counties, the most expensive by far is Marin, whose median home price is now the highest in the state. (The chart below is just for houses, for which San Francisco has a higher median sales price, but for ALL home sales, including condos and TICs and such, Marin is higher.)
Home Sales by Property Type
In San Francisco, the number of condo sales recently overtook the number of house sales -- a consequence of the huge amount of new condo construction in the greater South of Market area of the city over the past 15 years. However, in the 3 North Bay counties, house sales still make up the huge majority of home sales.
Inventory of Listings for Sale
The supply of home listings available to purchase is now very, very low, as clearly illustrated below.
Percentage of Listings Accepting Offers
This is one of the purer statistics comparing demand to supply: the higher the percentage of listings accepting offers, the hotter the market.
Sales Price Percentages, Days on Market & Price Reductions
If a property is well priced, prepared and marketed, it usually sells relatively quickly for very close to (or even over) asking price. If it has to go through price reductions to sell, it closes at a large discount to original list price and, on average, takes a very long time to generate an accepted offer.
Average Days on Market
Months Supply of Inventory
Another standard statistic of supply and demand: The current reading would typically be considered to indicate strong “Seller’s markets” in Marin, Napa and Sonoma.
Distressed Home Sales & Foreclosures by County
One of the huge factors in the real estate market crash was the surge in distressed property sales: bank-owned property sales pursuant to foreclosure and short sales. The 3 North Bay counties were never as hard hit as many other counties, but to the extent they were, the distressed property market is now in rapid decline as the market recovers and values increase. This becomes a virtuous circle: the higher prices go, the fewer the number of owners underwater on their mortgage and the fewer the distressed sales; the fewer the distressed sales, the less their (very negative) influence on market values.
Still, even with the rapid decline shown on the two charts below, distressed property sales in the 1st quarter of 2013 still made up sizeable percentages of sales in all three counties, from about 18% in Marin, to about 30% in Sonoma and Napa. We expect to see these percentages decrease substantially in coming quarters.
Statistics are generalities and should be considered approximations: How they apply to any specific property is unknown. These analyses were performed in good faith with data derived from sources deemed reliable, but they may contain errors and are subject to revision. If you have any questions, please don’t hesitate to contact us.
© Paragon Real Estate Group, April 2013.