June 2023 Marin Market Report

June 2023 Marin
Market Report

Recapping the Spring 2023 Market

Median home sales prices have been climbing rapidly from mid-winter lows, though remaining well below peak prices hit in spring 2022.

The number of new listings coming on market over the past 12 months was the lowest in over 20 years (and almost certainly much longer): This is commonly ascribed to the “mortgage lock-in” effect. As buyer demand rebounded in 2023, this has contributed to upward pressure on home prices. Sales volume over the period was the lowest since the post-2008 recession. New listing and sales volumes have risen from their nadirs in mid-winter, but remain historically low.

Average days on market – the speed at which sold listings went into contract – have plunged in 2023. The percentage of home sales closing over asking price has rapidly increased, and the average home sale is once again selling above its original asking price.

Luxury home sales remain well down from spectacular peaks seen at the height of the pandemic boom, but have been rebounding since late 2022. May saw a large jump in luxury sales.

With bank crises, fed actions, inflation readings, and U.S. debt-default fears, interest rates have been volatile in 2023, with significant ups and downs. As of early June, 30-year, fixed-rate mortgages are running about a quarter percent below 7% (but rates can change quickly).

The 1st and 4th largest insurers of CA homes, State Farm and Allstate, have announced they will no longer write new policies in the state due to rising claims costs. It is too early to quantify the exact financial, political and market effects of their actions, or if other insurers will follow suit. Similar issues have come up in other states, such as Florida and Louisiana, and occurred with earthquake insurance in CA in the mid-1990’s, leading to the creation of CA Earthquake Authority.

Long-term, 12-Month-Rolling, Overview of Supply & Demand

Ultimately, it always boils down to supply & demand: When buyers compete for too few listings, home prices rise; when sellers compete for too few buyers, prices drop. The next chart reviews broad, long-term trends in new listings and sales: Each monthly reading reflects activity over a 1-year period. (Note that 12-month-rolling data = clearer trend lines, but can disguise and lag shorter-term changes).

One critical factor missing from the following chart is speed of sale: As a market heats up, new listings sell more quickly: During the pandemic boom, homes typically sold at their fastest rates ever. When demand declines during a downturn, listings take longer to sell: During the 2008-2011 market recession, days-on-market often doubled or tripled from historical norms – the average listing could take months to sell. Even if the new-listing count stays the same, the inventory of active listings available to purchase can climb or fall considerably depending on speed of sale, and how long the boom or slowdown lasts.

After the 2007-08 housing & stock market crash, buyer demand plunged, foreclosures and inventory soared, home prices cratered. Once the crisis passed, the quantity of listings coming on market dropped – no more flood of foreclosures, homeowners were moving less often, less new-home construction – just as buyer demand jumped with the high-tech hiring, population and wealth boom. Increasing demand vs. decreasing supply created strong upward pressure on prices. When the pandemic hit, a number of factors – interest rates, stock markets, contagion, work from home, increased migration, family care, etc. – came together, and the number of new listings quickly escalated but did not keep pace with the tremendous rise in demand leading to enormous median home price increases over a 2-year period.

Reverses in  economic conditions led to the 2022 market correction. Due to the “mortgage lock-in effect” – a reluctance of homeowners with very low-interest-rate mortgages to sell – the number of new listings sank but housing costs increased with rising interest rates consumer confidence slumped with inflation and stock market declines buyer demand fell days-on-market rose and prices declined. In 2023 demand rebounded while new listing activity remained severely depressed and prices started to rise again as buyers competed once more for scarce listings. (2023 changes do not yet stand out in the 12-month-rolling data. See 1-month-rolling charts later in this report for more recent shorter-term trends.)

Current Active Listings per Town

BELVEDERE

CORTE MADERA

FAIRFAX

GREENBRAE

KENTFIELD

LARKSPUR

MILL VALLEY

MUIR BEACH

NOVATO

ROSS

SAN ANSELMO

SAN RAFAEL

SAUSALITO

STINSON BEACH

TIBURON

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Sharon Kramlich

DRE #: 01184449
M: 415.609.4473
sharonkramlich.com
sharon.kramlich@compass.com

Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.