I learned a new word today: epistemophilia
I am an Epistemophile. A person that loves information and knowledge. (Apparently, I am also a logophile.)
I have been tracking and sharing local (Marin County and Sonoma County) real estate market information for quite some time and wanted to update it to reflect the effects of the low interest rates and the pandemic, for recent years. And now how the higher interest rates and lower inventory are currently affecting the local market. As you will see, higher net worth individuals in higher priced markets are not affected by this as much.
Let us start with the volume, the number of homes sold. The orange lines represent detached single family (SFR) Sonoma County home sales and the blue, Marin County. Sonoma County is much larger in terms of square miles so there are a lot more sales taking place in Sonoma County. Marin County is very small.
You can see a dip in volume in 2007, when the requirements for obtaining financing were tightened, resulting in fewer mortgages being funded (September 2007). Then, of course, there was a spike during the pandemic when rates were low and people realized they could work from home, which could be almost anywhere for many.
Of course, we are only 2 months into 2024, with an average of 74 homes per month for Marin County (yikes!) and 182 per month so far this year for Sonoma County—also very low. For the prior 23 years the average number of homes to sell each month in Marin County was 181, 391 for Sonoma County. So far this year, the volume is less than half of average.
Side Note: Marin Association of Realtors (MAR) reports that there are approximately 1,400 realtors in Marin County. North Bay Association of Realtors (NorBar) reports that they have roughly 3,600 members in Sonoma, Napa and parts of Mendocino and Lake Counties. So, let’s call it 3,000 for Sonoma and Napa. So, what we have here is about 5,000 locals (not including agents that sell here from other addresses) vying for this business.
Let us move on to historical prices.
The average sales price in Marin and Sonoma Counties has more than doubled since 2000. Again, we saw a dip after 2007, when they tightened lending requirements. And, again, a spike in 2020, 2021 and 2022 during the pandemic years, with low interest rates. Prices start to dip, if only a little in 2023 and 2024.
Another telling factor is how long it takes to sell a home, or the number of days on the market (DOM). Back around the turn of the century, in 2000, when the internet became mainstream and most everyone was using it daily—and you could buy a home in Marin for less than $1M—properties were on the market long enough for anyone and everyone interested in them to have a chance to see them in person.
Then, when mortgage brokers started lending money to anyone that could fog a mirror, things got a little frenzied. But when they stopped doing that, people once again were able to take some time to think about potential properties. Enter the pandemic and low rates, and all bets were off.
And here we are today, with higher interest rates and sellers staying put with their low-rate mortgages… even though inventory is low, buyers are getting a little bit of time (not much though!) to mull things over.
For more information on pretty much anything (especially Marin and Sonoma), but specifically if you are interested in selling or purchasing some fine Bay Area real estate, don’t hesitate to contact me:
415.308.1182
These numbers are current as of March 2, 2024, and the source is BAREIS+.
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