Bay Area Real Estate Sales.com Newsletter
August 2006
IN THIS ISSUE:
Marin Home Sales Statistics
Home sales hit 11-year low in Marin
What are the risks of remodeling without permits?
Luxury Home Values Rise in Second Quarter of 2006
What do Liz’s Clients Say?
Fast Facts
Marin Home Sales Statistics
To view the actual chart of stats, go to: August 2006 Stats 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 3rd month in a row, the average overall Marin market continues to be a Buyers Market.
Interestingly enough, homes again priced under $500,000 are sitting on the market longer and are currently in a “Strong Buyers” Market. Homes priced from $500,000 to 2,499,000 are in a “Buyers Market”; Probably the most interesting factor this August, is the fact that higher priced homes ($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”, with the exception of Larkspur and Mill Valley, which are in a “Balanced Market.”
Days on Market (DOM) and price changes when sold: The Average DOM for July is 73 days (a full 10 days longer than last month’s 63 days for July) and the Median is 56.
Sold price changes as compared to the original list price based on DOM. Although homes are sitting on the market for longer, prices are not dropping dramatically. For example, Year-to-date, homes that have “sat” for 121+ days the eventual sales price is still 95% of the original list price. Selling within 90 days, it is 97% of the original list price. Houses that are selling within 30 days of their listing date are still selling at or slightly above their list price. This factor alone shows how important it is to price your property correctly when it’s first listed for sale.
Home sales hit 11-year low in Marin
Marin IJ 8/17/06 – Median home prices fell in Marin County last month as sales dropped to their lowest level in 11 years.
Marin's median home price was $900,000 in July, down from $971,500 in June and down from $910,000 in July 2005.
The Marin median condo price increased slightly, to $555,000 last month from $546,500 in June, and up from $530,500 in July 2005.
Sales for both homes and condominiums totaled 286 in July, the lowest sales volume since July 1995, when 205 residences sold, according to DataQuick Information Systems, a real estate information service in La Jolla.
July home sales were down nearly 30 percent from July 2005, when 408 sold.
The situation mirrored the Bay Area trend, in which homes sales fell nearly 31 percent from 11,470 in July 2005 to 7,941 in July 2006 - the lowest in 10 years.
"Marin was no exception as the decline year to year was very similar to the Bay Area," DataQuick analyst Andrew LePage noted. "The slowdown under way for many months was just more pronounced in July and we are not sure if it is an anomaly or the beginning of a more similar slowdown. By fall we will know."
LePage said the market is slower in general due to several factors.
"We think a lot of demand that would be played out right now has already been spent," LePage said. "It was spent over the last few years because we think a lot of people rushed to take advantage of low mortgage rates and low interest rates."
Across the state, "It is almost certain the next stage will be that prices begin to drop," said Stephen Levy, director of the Palo Alto-based Center for the Continuing Study of the California Economy. "I think the more expensive homes over $1 million are more vulnerable at this time."
What are the risks of remodeling without permits?
By Diane Hymer
Most cities, by law, require homeowners within their jurisdictions to apply for building permits before making modifications to their homes. Precisely what projects require permits varies from one city to the next, as does the vigor of enforcement.
Fees are charged when a building permit is issued. A value is attached to the improvements which often triggers an increase in the assessed valuation of the property. So, work done with a building permit can result in an increase in the homeowner's property taxes.
The permit process can also involve inspections to make sure that work is done correctly and in compliance with relevant building codes. Depending on the building department, scheduling inspections can be a hassle. And waiting for inspectors takes time.
In order to save time and money some homeowners and contractors skip the permit process. However doing work without a permit can have serious consequences.
One East San Francisco Bay homeowner hired a contractor to convert a shed to a studio apartment for his daughter to live in. The contractor did the job without a city building permit. When the property was sold, the seller disclosed to the buyer that the work was done without a permit. California law requires that homeowners disclose to prospective buyers any work they have done without a permit.
Before going through with the sale, the buyers talked to a city building inspector to find out what it would take to make the converted shed into a legal structure. Unfortunately, the structure was so far from complying with the building code that the only economically feasible alternative was to tear it down. Consequently, the seller had to lower his price to reflect the loss of the apartment and the cost of demolition.
FIRST-TIME TIP: Before you commit to buying a home, it's a good idea to get a history of the permits on the property from the city building department. If permits for significant work are missing, ask the sellers for an explanation. Also, find out what impact this might have on you.
You may incur costs in the future if you buy a home that was renovated without permits. For example, let's say you that plan to remodel the kitchen and you plan to obtain the required building permits. If a city building inspector finds code violations from past work when he's inspecting your kitchen remodel, you may have to correct these violations before the inspector will sign off on the kitchen project. You might also be liable for penalty fees.
Appraisers often want to know that significant renovations were done with building permits. One couple found this to be the case when they sold their home in the Oakland hills. They had added a bedroom, a bath and a family room without permits. The addition doubled the square footage of the house. Without permits, the appraiser wasn't willing to give full value for the improvements. So the property appraised for significantly less than the purchase price.
To keep the sale from falling apart, the sellers took out permits which involved paying penalties. In order for the city inspector to confirm that the work was done properly, some walls had to be opened to expose plumbing and electrical work. The sellers' efforts to save money by bypassing the permit process ended up costing them much more in the long run.
THE CLOSING: Don't be lulled into a false sense of security if you discover that the building department isn't currently enforcing the permitting process. This policy could change in the future.
Luxury Home Values Rise in Second Quarter of 2006
SAN FRANCISCO (August 16, 2006)— Luxury home values posted small gains in Los Angeles, San Diego and San Francisco in the second quarter of 2006, according to the First Republic Prestige Home Index™ by First Republic Bank (NYSE: FRC), a leading provider of wealth management and private banking services.
The Index, which has tracked luxury homes since 1985, found:
San Francisco Bay Area values increased 0.3% from the first quarter of 2006 to the second quarter of 2006 and gained 4.8% from a year ago. The average luxury home in San Francisco is now a record $2.93 million, up $134,978 from a year ago.
"Over the past year, the luxury home market in California has transitioned to a more normal, stable market in which properties sell at a more measured and less frenetic pace," said Katherine August-deWilde, Chief Operating Officer of First Republic Bank. "Luxury home values continue to increase, but at a much slower rate due to rising inventory and interest rates. Homes are being priced more aggressively to sell because buyers have more options."
In San Francisco, values were up 0.3% compared to the first quarter—the slowest rate of appreciation since the third quarter of 2004. Over the past two years, quarterly increases in the San Francisco Bay Area have been no greater than 6%.
Agents in the San Francisco Bay Area said that well-priced homes in great locations are selling very well, but the market overall has weakened over the past year.
"The market between $2 million and $6 million is really strong because of continuing demand," said Caroline Kahn Werboff of Hill & Co. in San Francisco. "If the house is priced fairly, you're seeing multiple offers at or a little over the asking price. Interest rates would have to get up to double digits to make a significant difference." In the high end of the market, Kahn Werboff said there have been some price reductions. She said some buyers are reluctant because they believe prices will decline.
David Gowan of TRI Coldwell Banker said the market is more balanced, although slower than it has been in recent years. "Instead of selling in two weeks, properties are selling in two months, just like they would in a normal market. What we've seen the past six years is unusual." Gowan said buyers are generally making offers slightly under the asking price.
In San Francisco's East Bay, the market is slowing. "Over $2 million, our inventory is up and buyers aren't in a terrible hurry," said Tara Rochlin of Village Associates in Orinda. "We're seeing more sellers willing to negotiate and lower their prices. We're headed toward a more balanced market, which is better for everyone over the long term."
The First Republic Prestige Home Index™ is the first statistical model of its kind customized to measure changes in homes valued at more than $1 million in key California urban markets. Some common features of luxury homes in the Index: 3,000 to 6,000 square feet, three to six bedrooms, and three to six bathrooms. San Francisco Bay Area properties include a cross-section of luxury homes in Alamo, Atherton, Belvedere, Danville, Healdsburg, Hillsborough, Lafayette, Los Altos, Los Gatos, Mill Valley, Moraga, Orinda, Palo Alto, Piedmont, Portola Valley, Ross, St. Helena, San Francisco, Saratoga, Sonoma, Tiburon and Woodside.
What do Liz’s Clients Say?
“Our quest to locate a house that met specific requirements could not have been realized if it weren’t for the hard work and dedication of Liz McCarthy. Liz unselfishly spent an inordinate amount of time showing numerous properties over a two month period. Although we were extremely particular in our interests, she relentlessly did not give up until we eventually found the home of our dreams.
The entire process of finding a home and securing a loan to fit our budget could not have been accomplished had it not been the dedication of Liz and her desire to make deals happen. Thank you for your commitment and dedication.”
-Paul and Sonja Kermoyan
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: Liz@BayAreaRealEstateSales.com
“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 http://www.417greenfield.com/ or http://www.50milland.com/ for samples), she will post your home on over 50 websites.
Fast Facts
Calif. median home price - June 06: $ 575,800 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region June 06: Santa Barbara So. Coast $1,300,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region June 06: High Desert $ 334,790 (Source: C.A.R.)
Mortgage rates - week ending 8/17/06: (Source: Freddie Mac)
· 30-yr. fixed: 6.52%; Fees/points: 0.3%
· 15-yr. fixed: 6.2%; Fees/points: 0.3%
· 1-yr. adjustable: 5.69%; Fees/points: 0.8%
FREE…..You can search for Marin listings directly on BayAreaRealEstateSales.com: 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: http://www.50milland.com/ for an example
Be sure to check out all the other great content & features of my website:
http://www.bayarearealestatesales.com/
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The Bay Area Real Estate Newsletter is provided to you by:
Liz McCarthy
Real Estate Broker, e-PRO certified
Liz@BayAreaRealEstateSales.com
415-250-4929 (cell)
Mill Valley, CA 94941
Tuesday, August 15, 2006
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