A New Year Begins
And, we’re off! The year in real estate is off to a fast and furious start. The Fed kept its benchmark unchanged, rates slipped below 7% and the stock market continued to roar ( though with great volatility). The terrible fires in Southern California have rocked the state.The human and financial costs and consequences will take years to evaluate. Many are also analyzing their own fire preparedness and we are still sorting out the fallout for homes with the insurance industry which has become challenging with only a handful of carriers to choose from. Finally, national and international politics seem to bring fresh developments moment by moment with uncertain effects on the economy and the housing markets.
In spite of this backdrop, real estate continues to be hyper local. Marin real estate is predictably very active after the Winter slumber. Buyers are out in force. Despite the rainy weather, open houses are busy with new listings just starting to trickle onto the market. Homes that have not sold in the Fall/Winter are being trotted back out and snapped up due to the lack of inventory. Many homes are seeing multiple offers. Families that want their children enrolled in Marin schools, are seriously out looking so they can be ready for Fall enrollment. The rains should bring green hills and make for lush gardens. All these ingredients make for a promising Spring season. If you are considering making a change, reach out and we can discuss your options.
Let’s Go!
Resilence sums up 2024 and showed the value of owning real estate in Marin County while many other areas in the State and country floundered. The Marin County median price sale ticked up year over year yet still below the pandemic and low interest rate boom year of 2022. The number of new listings and sales rose from 2023 but the volume of sales was well below long term norms and not seen since 1995. This was probably fueled by higher interest rates, job market concerns, low housing inventory and the backdrop of a presidential election. The silver lining was that the luxury home market ( $5M+ homes) outperformed the market aided by the rising stock market. There was a slight reduction in the overbidding and listings took a few days longer to sell.
Macroeconomically, there were some ups and downs in 2024. Inflation dropped from 3.1% to 2.7% , a welcome decline but not as much and consistently as the market had planned. In September, the Fed reduced the benchmark rate for the first time in 4 years, followed by 2 more cuts in November and December but confounding expectations, interest rates rose ending the year higher than they began. The Fed has released a tentative forecast of two small reductions in 2025 but they may not be until the Fall depending on how the economy performs. Despite significant volatility and uncertainty, the stock market saw very substantial appreciation in 2024, boosting household wealth, especially for the affluent. This translated to some purchases being all cash purchases, especially in the higher price points. Consumer confidence rose in the second half of the year to end 6% higher than a year earlier and seems poised to improve.
Real estate markets are fiercely seasonal and, as usual, December was the slowest month for new listings and listings going into contract. As we go into January, Seller and Buyers are coming out of their seasonal hibernation and activity is rapidly rebounding. We hope to see an acceleration of inventory as we go into Spring. Buyers understand that rates are at their new normal and life must go on with marriage, expanding families, job transfers, divorce and other life changes. Also, with the recent tragic fires in Southern California, we wait to see how the insurance market in Marin County will be impacted. Real Estate in Marin is ever evolving and yet many continue to want to make their homes here. I am prepping homes now for sale and have several Buyers from out of the area eager to make their homes in this special place. Please reach out if I can help answer any questions or be a resource. Looking forward to a healthy and prosperous 2025!
The Fed finally did it and cut the key interest rate a full half a point on September 18th, the first since we have come out of Covid. But, don't call your lender about a refi just yet. This rate cut was much anticipated so was already baked into rates. Mortgage rates are tied primarily to the bond market which is impacted by rate cuts but it can take some time for all of this to settle in. Lenders also take into account general market conditions such as inflation and job reports so it could take up to 6 weeks to start seeing a change at the retail level. And, the market has been somewhat slow with buyers out looking but ever so cautious and waiting, waiting, waiting for the right situation unless you have the perfect, squeaky clean, in the flats, walk to everything stunner home that captivates everyone and draws in multiple offers!
Same Loan Less Groan. Over the past two months, the average thirty year mortgage rate fell .51% which has improved affordability. Each .10% increase or decrease to rates roughly equals a 1% increase or decrease in your mortgage payment so that half point drop already means that your monthly payment on homes are 5-6% cheaper than they were over the summer.
One counter intuitive train of thought is that median prices may head upward with more inventory as Sellers now decide to sell when they can get lower rates for their own purchases and more homes for sale combined with lower rates can draw out more buyers and activate the market.
