Friday, September 22, 2006

September 2006 Marin Real Estate Newsletter

Bay Area Real Estate Newsletter
September 2006

Marin Home Sales Statistics
Marin Housing Market Shifts To Buyers
Bay Area Home Sales Decline, Prices Level Off
NAR: Contrary To Many Reports, There Is Not A ‘National Housing Bubble
Cooling Real Estate Market Presents Challenge For Sellers
Large Insurer Requests Rate Decrease For Homeowner's Insurance
Adjustable-Rate Mortgage Activity At Lowest Level Since October 2003
What Do Liz’s Clients Say?
Fast Facts


To view the actual stats for September 2006, click here: Marin Home Sales Statistics

The overall Marin home sales market continues to cool according to the following statistics.

These statistics show how many homes are available for sale in Marin, and of those how many are currently in contract (either pending or contingent). For the last 3 months the Marin Real Estate Market was in a “Buyers Market”, and this month for the first time, the overall Market is in a “Strong Buyers” category (which means that only 11%-20% of all available homes for sale are in contract.*

Interestingly enough, homes again priced under $500,000 are sitting on the market longer and are currently in a “Strong Buyers” Market whereas homes priced from $500,000 to 999,000 are in a “Buyers Market”. Again, like last month I find it very interesting to note that homes priced from $2,500,000 to $2,999,999 are in a “Balanced Market!” To me, this seems to mean that buyers in the higher end of the Marin real estate market are not affected as much by the increase in interest rates, as they are more likely to be making their home purchases with more cash as compared to mortgages.

This month, every town in Marin is in some type of “Buyers Market”, whereas last month Larkspur and Mill Valley, were both in a “Balanced Market.”

Days on Market (DOM) and price changes when sold: The Average DOM for August is 74 days (only 1 day longer than last month’s 73 days for July) and the Median is 58. This means that it is taking an average of 2 months for houses to go into a PENDING status. A note of clarity here. This does NOT mean when the house goes into contract (as it is still in a contingent state). The DOM clicker is stopped when all contingencies are removed, which is not entirely accurate at tracking how long it takes to get a house into contract. For example, a seller may have a house go into contract just 1 or 2 weeks after it is first listed, but with a long contingency period (say 45 days). This would mean that the DOM would show almost 2 months for that house to sell, whereas it was generally off the market after only a few weeks.

I’ve decided to no longer track the Sold price changes as compared to the original list price based on DOM. The reason for this is that I’ve just discovered that our MLS system’s way of calculating these stats are not really accurate. Their stats show very little price drop even over time (around 5%), BUT these price changes only reflect the price SOLD compared to the last price change that was made NOT the original list price!!! So basically, overall the price drops are not accurately reflected in these comps. I will list them (based on our MLS way of calculating them) this month, but will no longer track the data.

And for those of you who do read these stats, I’d love to know that you find the information useful! It actually takes me quite a lot of time to track, compile and post the data each month – and I’d love to know that it is being utilized! Send me an email to let me know you like getting it!
If you know of anyone who would like to receive this monthly newsletter or is thinking of either buying or selling a home please let me know. I’d love your referrals!

By Carla Bova, Marin IJ 9/21/06

Marin's median home price edged up last month, although sales volume fell from a year earlier. The median price of a single-family home in August was $920,000, up from $900,000 in July, and the same as August 2005. Single-family sales totaled 277, up from 204 in July but down from 297 in August 2005.

Total home sales, including condominiums, were down 13 percent from last year, mirroring a trend throughout the Bay Area where sales were down from 18 percent in San Mateo County to about 47 percent in Napa County, according to DataQuick Information Systems, a La Jolla-based real estate information service. Marin condo sales were up from 60 in July to 70 last month, but that figure was down 36.4 percent from 110 units sold in August 2005.

Stephen Levy, director of the Palo Alto-based Center for the Continuing Study of the California Economy, said the data suggest Marin is participating in the housing slowdown that is occurring in the Bay Area and statewide. "So far the major trend is the sharp decrease in sales activity but I expect that prices, which are leveling off now, will decline over the next year," Levy said. "I think we are at the beginning of the slowdown in the housing market in terms of prices.

"The reason we are toward the beginning of a slowdown in prices is that it usually takes several months before sellers realize they are going to need to cut the price to sell," Levy said. "Over time what starts out as leveling in price can turn into a decline in price."

The Marin median condo price dropped to $546,500 last month, down from $575,000 last year and down from $555,000 in July.

Pacific Union broker Barry Crotty said condo prices fell because many first-time homebuyers are priced out of the market. "Condo buyers are tied much closer to the rise and fall of interest rates and that has a direct effect on their ability to purchase," Crotty said.
He said that while the number of single-family home sales fell compared with last year, the increase in sales from July indicates a shift in the market.

"We definitely had a falling off in the summertime and the numbers suggest in August we are coming out of that dip," Crotty said. "People feel confident that there is not a bubble about to burst, that the economy is going well, interest rates are coming down and it is a good time to buy housing and that is what happened in August. "It is a much more attractive market for buyers with decent interest rates, the ability to negotiate more on price and terms and more properties to choose from."

There are more sellers than buyers lately, Levy noted. "Buyers see stories in the news which are correct about the market slowing so they feel they can be more selective and aggressive," Levy said.

Valerie Castellana, president-elect of the Marin Association of Realtors, said buyers "have a lot more power to negotiate than they did a year ago - but sellers are definitely holding on to their pricing."

DataQuick - La Jolla, CA.---- September 20, 2006

Home sales in the Bay Area declined again last month as prices continued to level off, a real estate information service reported.
A total of 9,128 new and resale houses and condos were sold in the nine-county region last month. That was up 14.9 percent from 7,941 for July, and down 24.9 percent from 12,154 for August last year, according to DataQuick Information Systems.

Last month was the slowest August since 1997 when 9,080 homes were sold. DataQuick's statistics go back to 1988: the slowest August was in 1992 with 6,326 sales, the strongest was in 2003 with 12,488. The average August sales count since 1988 is 9,530.
"Several things are going on. Many homes are being offered for sale at unrealistically high prices as sellers try to game the peak of the market. Buyers appear to be taking a wait-and-see approach as sellers get real with their asking prices. The market seems to be going into a lull, until this all shakes out. It does appear that the strong appreciation of the recent past is leveling off," said Marshall Prentice, DataQuick president.

The median price paid for a Bay Area home was $620,000 last month. That was down 1.1 percent from $627,000 in July, and up 0.2 percent from $619,000 for August a year ago. Last month's year-over- year increase was the lowest since March 2002 when the $381,000 median fell 1.3 percent.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $2,966 in August. That was down from $3,106 in July, and up from $2,761 for August a year ago. Adjusted for inflation.

Indicators of market distress are still largely absent. The use of adjustable-rate mortgages has decreased the last half year. Foreclosure rates are coming up from last year's low point, but are still below normal levels. Down payment sizes are stable and there have been no significant shifts in market mix, DataQuick reported.

DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

FREE…..You can search for Marin listings directly on Search for Homes

WASHINGTON (September 13, 2006) –

Housing prices are expected to continue to have a limited fall throughout 2006, according to testimony submitted by the National Association of Realtors® at today’s Senate Banking Committee hearing on the economy. In addition, NAR noted that the sellers’ market is transitioning to a buyers’ market, which can be healthy for some local economies.

“For the past five years, the housing market has been a steadfast leader in the U.S. economy,” Thomas M. Stevens, president of NAR, told the Senate Subcommittee on Housing and Transportation and the Senate Subcommittee on Economic Policy. “After five years of outstanding growth, the housing market is undergoing a period of adjustment and becoming more and more of a balanced market between buyers and sellers,” said Stevens.

Stevens said that with the falling demand and increased supply, home prices still realized slight appreciation though it was less than 1 percent, where over the past few years homes were appreciating at double-digit rates. “While recent developments raise concern, it is important to remember that the housing market varies significantly across the country,” said Stevens. One-third of the country (by population) is still seeing rising home prices, including Alaska, New Mexico, Vermont and many states in the South, excluding Florida. States that experienced the greatest increases in home prices in recent years are experiencing significantly lower sales, such as Arizona, California, Florida, Nevada and Virginia.

“Contrary to many reports, there is not a ‘national housing bubble,’” said Stevens. “We were seeing home prices and mortgage debt servicing cost-to-income ratios increase to unhealthy levels in some housing markets, which precipitate an adjustment.” Also contributing to the cooling housing market is an increase in mortgage rates of nearly one point, speculative investors pulling back and first-time buyers being priced out of the market.

Adjustments to the housing market are not unique and can often times be necessary, said Stevens. In addition to the rapid appreciation of years past, the rise in mortgage rates affects a homebuyer’s ability to finance and purchase a home. “Pressure is being felt in the housing market due to rising mortgage rates,” said Stevens. “With rising interest rates, homebuyers have become exhausted financially which explains why sales have tumbled in higher-priced regions of the country.”

NAR forecasts a drop in home sales of around 8 percent in 2006, followed by another 2 percent decline in 2007. These numbers are based on the stabilizing of mortgage rates and modest expansion of the economy. Also predicted is that home price growth will be minimal—less than 3 percent in 2006 and 2007. However, NAR warns that a significant shift in interest rates or a change in the economy would change this forecast. NAR notes that a soft landing is possible under the right circumstances and affordable mortgage financing is an important component in achieving this.

“Because the housing market strongly supports the economy and drives consumer spending, it is imperative that the Congress adopt policies that encourage homeownership and make purchasing a home obtainable for the millions of families who desire to own a home of their own. NAR stands ready to work with Congress to continue to open the door to the American dream of homeownership,” said Stevens.

FREE…..You can search for Marin listings directly on Search for Homes

By Dian Hymer

The housing market has changed. There are fewer multiple offers. Negotiation is back in vogue. Listings, in general, are taking longer to sell. And some listings are not selling at all.
What are your options if your home is less desirable in the current marketplace than you'd hoped it would be?
One option is reduce your price. Another is to hold out for a while, hoping that the market improves to meet your price. In most cases, however, the latter option is unlikely to yield results. The robust housing market of the last several years appears to be taking a break. No one knows how long it will be before we see double-digit price appreciation again. Many experts believe it will be years. A third option, if there's no urgency to sell, is to rent the property for a time and sell at a later date. This might be worth considering. However, as with any scheme, there are pros and cons that should be evaluated carefully before making a decision.
On the positive side, a property that is, or will soon be, sitting empty will generate income. This income can help offset mortgage and property tax obligations and homeowner association dues for condo owners. Another plus is that you can buy time until the market improves.
On the other side, consider that the market in most places is still good. 2006 isn't expected to be as strong a year for homes sales as was 2005, which was the best year ever. However, David Lereah, chief economist for the National Association of Realtors, predicts that the 2006 home sales volume will be the third best ever.

A risk in renting now and selling in 2007 or later is that the home sale market might not be as good then as it is now. If interest rates rise considerably in the interim, it most certainly won't be better. A downturn in the general economy also wouldn't bode well for the housing market, particularly if accompanied by higher interest rates and oil prices.

HOME SELLER TIP: An important factor to consider is the tax implications of renting rather than selling. If you have owned and occupied the property as your primary residence for two of the last five years, you are entitled to a capital gain tax exemption. For a single individual, $250,000 of capital gain is tax-free. The exemption is $500,000 for a married couple who files jointly.

If you wait over three years to sell because of market conditions, you would lose this valuable exemption unless you move back in to the property, which might not be convenient or possible at that time. You could forgo the exemption and turn the property into a permanent rental for tax purposes. At some later date, you might do a 1031 exchange and trade this investment property for another, thereby deferring tax on the gain.

However, deferring gain on an investment property may not be as advantageous as taking the tax-free gain you can realize when you sell a personal residence. Be sure to consult with a knowledgeable tax adviser about the consequences of turning your single-family residence into a temporary or permanent rental.

Even if you do sell in time to preserve your capital gain tax exemption, you're likely to face additional expenses preparing your home for sale. Tenants usually don't care for a property as an owner would, so you should anticipate that repairs and renovations will be necessary.
THE CLOSING: When you take into account the cost of future renovations and staging, and the uncertainty of a future market, you might be better off lowering your asking price and selling now.

FREE…..You can search for Marin listings directly on Search for Homes

For Release: September 6, 2006

Insurance Commissioner John Garamendi Announces State Farm’s Request for a 10.6 % Reduction in Rates – 1.2 Million California
Homeowners and Renters Will Benefit

SACRAMENTO – Insurance Commissioner John Garamendi today announced that State Farm Insurance has requested a 10.6% reduction in homeowners’ insurance rates, amounting to $123 million in savings for 1.2 million California homeowners and renters. The average policyholder would save $103 annually.
The rate reduction filing, which must be reviewed by the Department of Insurance before any approval is given, comes on the heels of the Commissioner’s June order requiring four major insurers to justify their rates. An earlier study by the Department determined that insurers have been paying far less in claims than they collect in premiums.

“This is good news for State Farm policyholders and for all California insurance consumers,” said Commissioner Garamendi. Noting that USAA sought a decrease earlier this year, the Commissioner said he expects even more savings for consumers. “As more large companies file for decreases, others will be forced to follow suit in order to compete.”

Wednesday’s announcement is in sharp contrast to Allstate’s announcement last week that it would seek a 12.2 percent increase in its homeowners insurance rates. In June, the Commissioner ordered Allstate, State Farm, Farmers Insurance and Safeco Insurance to justify their rates. The move was prompted by the Department study’s finding that four of the state’s largest homeowners’ insurers were paying far less than 50 cents of each premium dollar to settle policyholder claims. The four insurers account for 51% of the California homeowners’ insurance market.

The study, called “Lower Claims, Higher Profits: Where Do Your Premium Dollars Go?” disclosed the historically low loss ratios that the insurers have experienced over the past two years. For instance, in 2005 State Farm kept 62.4% of each premium dollar after making payments for claims; Allstate kept 59%; Farmers kept 62.3%; and Safeco kept 73.7%. In light of that extraordinarily low percentage of premium dollars used to settle policyholder claims, Commissioner Garamendi ordered the four insurers to provide data showing their current rates are not excessive.

“As Commissioner I want this industry to remain healthy and competitive in California,” said Commissioner Garamendi. “However, it is my duty to uphold the law that requires that insurance company profits not be excessive. I am determined to fulfill my responsibility, ensuring that premiums paid by California homeowners do not exceed what is necessary for insurers to pay claims and earn a reasonable profit.”


WASHINGTON, D.C. (September 6, 2006) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 1. The Market Composite Index, a measure of mortgage loan application volume, was 566.3, an increase of 1.8 percent on a seasonally adjusted basis from 556.5 one week earlier. On an unadjusted basis, the Index increased 0.4 percent compared with the previous week but was down 26.1 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index increased by 3.7 percent to 389.7 from 375.9 the previous week and the Refinance Index decreased by 0.9 percent to 1594.7 from 1609.2 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which increased by 1.5 percent to 838.7 from 826.7 the previous week, and the Government Index, which increased 5.8 percent to 112.1 from 106 the previous week.
The four week moving average for the seasonally-adjusted Market Index is up 0.6 percent to 561.4 from 558.1. The four week moving average is up 0.1 percent to 383.4 from 383.2 for the Purchase Index, while this average is up 1.2 percent to 1600 from 1580.8 for the Refinance Index.

The refinance share of mortgage activity decreased to 41.0 percent of total applications from 41.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 26.2 percent of total applications from 26.8 percent the previous week. The ARM share is at its lowest level since October 2003.

FREE…..You can search for Marin listings directly on Search for Homes


“Liz proved to be much more than we ever expected from a real estate agent. Apart from providing us with the most up-to date listings, extraordinarily useful market data, and useful information regarding schools, neighborhoods, and the like, Liz served as our advisor and our advocate. With ease and grace, Liz navigated us through the process, always making a point of listening to our concerns, understanding our needs, and working within our limitations.

We especially appreciated Liz’s candor and her ability and willingness to articulate all the facts and issues that we should be considering. Obviously, we wanted to make the right decision for ourselves, but were not always certain that we were considering all of the important issues. Far from being pushy, Liz has a talent for understanding her clients and providing them with balanced, thoughtful advice. She helped us reach our own conclusions without pushing us in any specific direction.

We would recommend Liz McCarthy to any potential home buyer. Whether first-time buyers or experienced buyers, she will impress them all with her extremely hard work, dedication and professionalism. Whenever anyone tells us that they are thinking about buying in Marin, we immediately tell them that they we have the greatest real estate agent for them!”
-D&A Morris

If you would like to have Liz help you sell your Marin home or help you in finding a home, or you know of someone that could benefit from her services, just send her an email:

“High-Touch through High-Tech”: Did you know that Liz McCarthy is ePro Internet Certified by the National Association of Realtors and that 70 percent of home buyers today use the internet in their home search? Why are you still working with a Realtor who isn’t a technology expert?

What this means to you...
Home Buyers: Liz is an expert in helping save you time by using the internet, email and other technology resources to help save your valuable time and money. She knows how busy you are!

Home Sellers: Liz will market your home extensively on the internet: a personal property website (see or for samples), she will post your home on over 50 websites.


Calif. median home price - July 06: $ 567,360 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region July 06: Santa Barbara So. Coast $1,075,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region July 06: High Desert $ 333,330 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Second Quarter 06:23 percent (Source: C.A.R.)

Mortgage rates - week ending 9/13/06: (Source: Freddie Mac)
· 30-yr. fixed: 6.47%; Fees/points: 0.4%
· 15-yr. fixed: 6.16%; Fees/points: 0.4%
· 1-yr. adjustable: 5.63%; Fees/points: 0.7%

FREE…..You can search for Marin listings directly on Search for Homes

If you are thinking of selling your home, I would be more than happy to give you a free home evaluation. I also create property specific websites for all of my listings: visit: for an example

Be sure to check out all the other great content & features of my website:

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The Bay Area Real Estate Newsletter is provided to you by:

Liz McCarthy
Real Estate Broker, e-PRO certified
415-250-4929 (cell)
Mill Valley, CA 94941