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    Marin County Real Estate Tracker: February 2020

    Corcoran MarketTracker Corcoran
    Change is in the air this new year. Zephyr has announced our affiliation with Corcoran Global Living! This change in branding will bring additional resources, national connections, and a change in logo. However, Zephyr has not sold, our core service model, leadership team, and the outstanding, local agents that have made Zephyr the number one locally owned real estate company in the Bay Area for the last 42 years remain strong as ever. Through this new affiliation with Corcoran we are leading the charge for independent real estate companies to unite and continue to fiercely compete with big national companies. We are the same company and same agents you have trusted to meet your needs with local expertise.

    While we are excited about this evolution, the market marches on. Last year, unrelenting rain drowned the first quarter. This year, we will take a look back not only to 2019 but also to 2018 to get a better understanding of what 2020 might have in store.

    The Big Picture on Pricing

    Since 2018, the median sales price (MSP) of single family homes has dipped 5.14%. The good news is that 2019 finished strong with the MSP of single family homes up 6.67%. That could mean that we are facing another tough January rather than a more serious trend. The MSP of condos increased 6.78% since January of 2018—another indication that we can remain calm and confident.

    What we Lack in Inventory…

    The Bay Area is notorious for our lack of inventory. In January, the number of new listings for all property types was at its lowest since 2015, down 37.6%. The number of active listings is more divided between single family homes and condos (1), which indicates that the total inventory is more complicated than just January can reveal.

    What we lack in inventory (2), we make up for in demand. Though pending sales in January were down for all property types, 83.45% of new listings sold! This means that the only thing holding back the pending sales was the lack of inventory. When we look more closely at the different property types, further evidence of this inventory constraint emerges. Pending sales for single family homes, for which the number of active listings has decreased, were up only 1.16%. Pending sales for condos, for which the number of active listings has increased, were up 67.74%.

    Average days on market (DOM) reflects this consistent, Bay Area demand. DOM for single family homes decreased 8.96%, and that of condos dipped 12.07%. Months supply of inventory (MSI) (3) is another good indicator of demand. Anything under a 4 is considered a seller’s market, so, at 1.8, we are firmly in that category.

    The Insight of Absorption Rate

    The absorption rate (AR) (4) offers a more detailed look at what is happening in the market right now. With high demand, we would expect to see an increase in the AR. However, since January of 2018, the AR of single family homes is down 25.53%. Interestingly, since January of 2019, the AR of single family homes is up 31.23%. In conjunction with the fact that 83.45% of all new listings sold, this indicates that buyers are overlooking the homes that have been on the market for longer and jumping on homes that are fresh to the market.

    Advice for Buyers and Sellers

    Taking all of the data into account, what should prospective buyers and sellers do? The first thing to consider is property type. The contrast in inventory between single family homes and condos will certainly require a different strategy whether buying or selling.

    Since interest rates will likely continue at their historically low levels for some time, demand should remain high. Anecdotal evidence from our agents suggests that newly listed, well-priced properties are selling quickly. If you’ve been thinking of buying or selling, now is a good time to sit down with your expert, Corcoran agent and discuss strategies.

    (1) The number of active listings of single family homes is down 4.05% since 2018, and the number of active listings of condos is up 31.4% in that same time frame.

    (2) Pending sales for all property types were down 19.75% in January 2020.

    (3) Months supply of inventory measures how many months it would take to sell all current inventory if no new listings come on the market.

    (4) Absorption rate measures the percentage of homes sold in that month.

     
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    David O'Brien
    Broker Associate GRI
    415.342.1968
    LIC# 01832087
    Deirdre O'Brien
    Team O'Brien Top Producer
    415.948.3197
    LIC# 01990538
    Source: Bay Area Real Estate Information Services® MLS (BAREIS MLS). Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS.

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