The house in the May 19, 2008 Forbes article is estimated to cost two billion dollars, has 400,000 square feet and a separate gym for each family member. It is in India and owned by Mukesh Ambani, the fifth richest man in the world.
Obviously money is not the issue. The question is how much house is too much. Yes some people can afford this but how do you rationalize wasting the energy required to heat or air condition 400,000 square feet for one family?
What about Marin County, do families need 20,000 square feet homes? If they can afford it why can’t they have it? No one needs that much space, that’s why. We don’t have the energy to indulge egos. Regardless of construction or energy efficiency no large McMansion is Green and none of them add any value to Marin. I would argue, in the aggregate, they reduce the real value of Marin and the charm that has taken decades to develop.
Too many cute homes in Marin have been torn down to make room for the latest, greatest McMansion. Unincorporated Marin and some Marin cities have enacted a maximum size for new home construction. This is the result of some common sense and a combination of “not in my backyard” or “we don’t need any homes larger than MY McMansion”.
Is there really anything wrong with a family of four living with less than 5,000 square feet? I don’t want to take away from anyone’s success or living standard I am just saying at some point the extra space is more about ego than requirements. Sure, some may realistically use the space, large family, in-laws, home office, etc., and those don’t bother me I just don’t want Marin to be only for the wealthy.
Warren Carreiro, Broker
Warren@RealtyOfMarin.com
www.RealtyOfMarin.com
No, this article was not written ten years ago, these are Marin condominiums from Sausalito, San Rafael and Novato all currently on the market with an asking price of less than $200,000. The lower price point has taken a significantly larger hit than the average Marin house.
If you have an interest in looking at this type of investment property let me know.
While I am on the subject of lower priced homes there are 105 condos in Marin priced under $300,000 and what I find interesting is while 31 of those are in escrow the numbers don’t add up to all of them closing. For example for February, March, and April 2008 an average of 3 units per month closed. That would imply we have over 30 months of low priced condo inventory. If you look at the over thirty in escrow the number should be closer to just over three months inventory. So what gives here, is May going to be a super month or are these just not closing? Because I have not been following this statistic I can’t say for sure but when probing a little deeper I find that the vast majority of these condos in escrow are short sales.
In prior post I have written about the large percentage of short sales that fall out of escrow. Part of the reason for this is sellers and listing agents are not always realistic about the asking price. After all, it is the bank that has to agree to take something less than the full loan payoff, they are the one short at the end of the day. I am not defending banks or their prior practices by any streach, just pointing out that short sales fall apart for many reasons; lack of or untimely bank response to offers, and unrealistic asking and offer prices just to name a couple. That being said, I feel if you are willing to put up with what it takes to close a short sale you better have gotten a very good price on the property.
Warren Carreiro, Broker
Warren@RealtyOfMarin.com
www.RealtyOfMarin.com
First time buyers have not seen numbers like this in years. For the past few years (looking at the first quarter of the year for single family homes in MLS), 2005, 2006, and 2007 specifically; only 7% to 9% of Marin County homes sold for less than $600,000. For the first quarter of 2008 28% of homes sold for under $600,000.
It is an interesting number because it is more difficult for new buyers to get loans. Most buyers tend to spend as much as they can afford when buying a home which means these were not buyers looking at $700,000 homes and then deciding they could get what they wanted for under six.
Where are these buyers coming from? There is not a statistic to answer that question but here is my take. In the past there were so few homes available at that price and those that were on the market did not offer much appeal. Now when a buyer goes looking for a home and can’t spend over $600,000 they have some nice homes to choose from. In Marin the lower price homes were hit the hardest with the mortgage mess. This put price pressure on sellers to lower prices and they have.
If you thought you could not afford a single family home in Marin that may not be true any longer.
Warren Carreiro, Broker
Warren@RealtyOfMarin.com
www.RealtyOfMarin.com
Reading the newspaper and watching television I could assume that my home town of San Rafael, California has experienced a meltdown as well. Well, I hate to pop your bubble but the Marin County B.A.R.I.E.S (MLS) statistics don’t show that has occurred as you can see from the chart below.
Does this mean this is the best time to buy San Rafael real estate? As a real estate broker you would expect me to say, don’t wait, this is the best time to buy Marin real estate. Well, I don’t want to disappoint but I don’t know when the bottom (or top) of the market has hit. I recently heard someone say that those who will make money in real estate in the next ten years will be buying in the next two years and I agree with that.
Additionally, why are you buying a home, is this going to be a place to put your roots down and stay for many years or are you trying to flip it with perfect timing? When I purchased my home in 1992 prices were soft for a couple of years after. If my intention was to flip it I would have lost money. That was not my intention, I was looking for a home for my family. The home has increased in value tremendously and has been a fantastic investment. It really did not and does not matter if the value goes up or down for a few years because I am not selling, this is my home.
So, if you are in the market for a home and plan on spending over five years there, Marin history says it will also be a great investment. If interest rates were to rise, and they are still low, it would make that purchase all the more difficult. If you are waiting for the “bottom” of the market we may already be there and if you wait until the market turns it is too late to negotiate while you still hold the cards.
Here are the statistics for single family homes in Central San Rafael (zip 94901) for the past three years
| Single Family Homes |
First Quarter2006 |
First Quarter2007 |
First Quarter2008 |
| Number Sold |
55 |
59 |
32 |
| Median Price |
$956,000 |
$875,000 |
$982,500 |
| Median Sq. Ft. |
2,023 |
1,914 |
2,125 |
| Days on Market |
37 |
45 |
86 |
Homes are are taking longer to sell and if you can qualify for loan, you have great negotiating power.
Warren Carreiro, Broker
warren@RealtyOfMarin.com
www.RealtyOfMarin.com
REO House
March 10, 2008
REO is a real estate term which means “real estate owned”. The real estate is owned by bank or lender, typically as a result of foreclosure. When a bank lends you money to purchase a house, the home is collateral for the loan which means if you don’t make your payments the bank has the right to take ownership of the property. Mind you, this is not property the bank wanted or wants to keep, it is a drag on their balance sheet and ties up money that could be used for other loans.
Once a bank owns the home they want to sell it a quickly as possible. This does not mean a fire sale but often the prices are slightly under market price. The banks will use a professional appraiser and a couple of real estate brokers to help determine market price. The bank is not legally required to complete the usual disclosure documents because typically they don’t have enough information, though they still must disclose what they do know. For buyer’s this means the home is purchase “as is” so it is especially important to get good inspections.
Warren Carreiro, Broker
Marin County Real Estate
Homes You Love. Advice You Trust TM
http://www.realtyofmarin.com/
Warren@RealtyOfMarin.com
Most of Marin County Real Estate does not know what a bubble is. Sure, the Novato market is soft with lower prices and Marin County Starter Homes have not prices like this in years but when you look at the whole picture we are doing quite well. The chart below is for single family homes and does not include condominiums. It looks at January BARIES MLS results for three years and was compiled by Warren Carreiro, a broker with Frank Howard Allen Realtors. Looking at one month at a time does not show a tread, however, with three years running it suggest where the market stands.
Marin County Single Family Home Sales (using median for square feet, sales price and days on market: DOM)
|
All of Marin |
|
|
| Year |
Jan 2008 |
Jan 2007 |
Jan 2006 |
| # Sales |
79 |
113 |
116 |
| Sq. Ft. |
1918 |
1936 |
1856 |
| Price |
$1,050,000 |
950,000 |
869,000 |
| DOM |
84 |
87 |
70 |
|
Without Novato |
|
|
| Year |
Jan 2008 |
Jan 2007 |
Jan 2006 |
| # Sales |
68 |
95 |
89 |
| Sq. Ft. |
1922 |
2011 |
1854 |
| Price |
$1,227,500 |
1,085,000 |
895,000 |
| DOM |
68 |
83 |
77 |
|
Novato Only |
|
|
| Year |
Jan 2008 |
Jan 2007 |
Jan 2006 |
| # Sales |
11 |
18 |
27 |
| Sq. Ft. |
1911 |
1692 |
1971 |
| Price |
$639,000 |
701,500 |
755,000 |
| DOM |
147 |
102 |
59 |
|
|
|
|
Warren Carreiro, Broker
warren@RealtyOfMarin.com
www.realtyofmarin.com
Sales of residential real estate for all of Marin County were down 29% for the last quarter of 2007 compared to 2006. I do not think that should come as a surprise to anyone. Overall the median price is up which is somewhat misleading because there are many examples of homes that sold one or two years ago that are on the market again for a lower price. To help explain the seeming difference it is necessary to look at geographic regions within Marin County Real Estate. Those numbers show that significantly fewer homes are selling in North and West Marin. Home sales are also down from San Rafael South; however, the percentage decline is much smaller. As you likely know, your Marin Realtor should tell you if you don’t, Central and Southern Marin Real Estate is more expensive than Novato and much of West Marin.
The statistics shown below are from BARIES, Marin MLS as of January 11, 2008. I have divided Central and Southern Marin from Northern and West Marin to help explain this difference.
4th Q 2007 4th Q 2006
All of Marin
Number of Sales 484 686
Median Price* $878,000 $840,000
Median Square Feet 1,693 1,677
West & Northern Marin
Number of Sales 110 206
Median Price* $630,000 $730,000
Median Square Feet 1,580 1,635
Central & Southern Marin
Number of Sales 372 475
Median Price* $984,000 $900,000
Median Square Feet 1,773 1,687
*Includes both Marin Single Family Homes and Condominiums.
Warren Carreiro, Broker
www.realtyofmarin.com
warren@RealtyOfMarin
Looking across California it is obvious that communities with a huge amount of new home construction over the past several years are suffering substantial price drops. Much of the new construction was first time buyers with little money for a down payment.
Marin County has very little new construction and as a result a fairly fixed supply of single family homes. This, I believe, is a significant part of the reason Marin real estate prices have not taken a beating like much of the state. The other major factors that make Marin “special” are quality of life issues; weather, open-space, culture, etc.
Although the number of home sales is down overall in Marin, that is not the case for the very expensive homes indicated in my prior articles or for single family residences under $500,000 as indicated below:
Year 2007 2006
Number of sales 17 13
Median Price $465,000 $499,000
Median Square Feet 1,003 810
As you can see, Marin starter homes are more affordable than they have been in several years.
Information from BARIES Marin MLS as of January 8, 2008
Warren Carreiro, Broker
www.realtyofmarin.com
warren@RealtyOfMarin.com
Marin really is different, especially when it comes to housing. We are lucky enough to live in one of the most beautiful places on earth with vast open space which is available for the public to use. Our weather is great and we are close to both the ocean and a reasonable drive to Tahoe.
These numbers show the median price of single family homes have increased in 2007 compared with 2006. This increase in median price does not reflect the downward trend in Novato or other details which would show that homes in more expensive neighborhoods are selling faster than in less desirable areas. Prices are down in many Marin neighborhoods, however, Marin is holding up better than most the county and state. There are some great deals to be found, especially for starter homes.
2007 2006
Median Price $1,049,000 $955,000
Median Square Footage 1,990 1,882
Number of Sales 1,990 2,204
Information provided from sales listed in BARIES Marin MLS as of January 2, 2008
Warren Carreiro, Broker
www.realtyofmarin.com
warren@RealtyOfMarin.com
If you purchased your home in the past few years you may be eligible to temporally lower your property taxes. You must act by November 30th, so call the Marin County Assessor (415) 499-7215 to verify details.
With all the newspaper headlines you might be tempted to think anyone that owns a home would qualify but it does not work that way. For the current tax year vales are based on what your home was worth January 1, 2007. The assessor’s office only looks at closed sales, not how much they are asking for the home next door. The comparable sales should be plus or minus three months from January 1.
All of this is based on the difference between the current tax value (assessment) and the value of January 1. If you have owned your home for several years in your assessed value is LOWER (this is true for most homeowners) than the January 2007 value don’t do anything. Even if you bought your home two years ago you likely will not qualify for a reduction, it really depends on your home, neighborhood, and city. Novato, and in particular Hamilton have seen reduced values. From San Rafael south values are similar to two years ago, some more, some less.
The tax reduction is temporary, only lasting until values go up again. You can file for a permeate reduction if you have special circumstances. For example, you bought your home thinking it was in great condition only to find out it needed a new foundation, plumbing and electrical. Really what that means is you overpaid for your home and it basically did not have anything to do with then current market conditions. Call the Marin County Assessor for details.
If after reading all this and you think you have a case get the form and visit the Marin County Assessor. By the way, this applies to all of California. For more information Google “California Prop. 8″.
Have a great Thanksgiving, and let me know if you have any questions on this. Remember, if you ever need a contractor or service for your home, I keep a list of the good ones.
Warren Carreiro
warren@RealtyOfMarin.com
www.realtyofmarin.com