Bay Area Real Estate Sales.com Newsletter

July 2006

 

IN THIS ISSUE:

 

Marin Home Sales Statistics

Cooling Real Estate Market Presents Challenge for Sellers

Great New Listing in San Anselmo

Should I Remodel or Move?

What do Liz’s Client’s Say?

Fast Facts

 

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).  The average overall Marin market continues to be a Buyers Market.   

 

Interestingly enough, homes priced under $500,000 are not selling, and are currently in a “Strong Buyers” Market.  Homes priced from $500,000 to $749,000 are in a “Balanced Market”; Homes priced from $750,000 to $1.5 Million are in a “Buyers Market”.

 

Last month Corte Madera, Fairfax and Larkspur were all in “Sellers Markets”, whereas this month only Larkspur is still in a Sellers Market.  Fairfax, Kentfield, Mill Valley, Novato, San Anselmo, San Rafael, and Sausalito are all in a Buyers Market; Belvedere, Corte Madera, and Tiburon are all in a Strong Buyers Market; and Ross is in an Extreme Buyers Market.

 

Days on Market (DOM) and price changes when sold:  The Average DOM for July is 63 days (as compared to 61 for June) and the Median is 38 (as compared to 48 for June).  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.

 

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!

 

 

 

 

 

SOLD PRICE CHANGE VS LIST PRICE BASED ON # OF DAYS ON MARKET**
Days on  Market	0-30 Days	31-60 Days	61-90 Days	91-120 Days	121+ Days	Total
June SP vs. LP	101.15%	97.86%	95.67%	97.36%	95.01%
June # of Solds	127	88	42	20	33	310
Year to Date SP vs. LP	101.16%	98.38%	96.89%	96.99%	94.65%
Year to Date # of Solds	530	370	196	100	199	1395

 

 

**Based on information from Bay Area Real Estate Information Services, Inc. (BAREIS).   Information has not been verified, is not guaranteed, and is subject to change and is based on one period of time.”

***Includes all: Sale Pending & Contingent properties

 

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

 

Great new Listing in San Anselmo

 

Fall in love with this sunny and bright 3 Bedroom, 2 Bathroom charming San Anselmo home. You'll find 1930's period details, an updated kitchen with marble counters and high-end stainless-steel appliances, hardwood floors and decorator colors. It is just up the street from one of San Anselmo's award wining elementary schools. It has a sunny deck for entertaining, a flat, grassy yard with a swing-set and a private drive with a locking gate. Ample storage and parking.

 

Go to www.27Rutherford.com for more property details and pictures.

 

Cooling Real Estate Market Presents Challenge for Sellers

By Diane 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.

 

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Should I Remodel or Move?

 

Most homeowners will sooner or later give serious thought to remodeling. Recently, a homeowner contemplated doing a costly renovation to a small, two-bedroom home. The major expense was the kitchen, which was only marginally functional. For more space, walls had to be knocked out. The engineering that was required to do this ran the cost of the kitchen up to $100,000. Does it make sense to make such costly renovations if you don't increase the square footage of the house in the process?

Before you can make a decision, you need to know the approximate current value of your home. The easiest way to get this information is to call your real estate agent and ask for a current market evaluation of your property. One quick phone call to your agent may be all it takes to decide whether or not to proceed with your plans.

For instance, one Oakland, Calif., homeowner paid $350,000 for his home six years ago. Without doing anything to the house, it would probably fetch $600,000 in the current market. If he were to proceed with the renovations at a cost of $150,000, he'd have $500,000 invested in the property—well below the current market value of the home in its present condition. The property will no doubt be worth quite a bit more after it's remodeled.

A general rule-of-thumb for remodeling is to make sure that you don't over-improve your home for the neighborhood. If the renovation tab in the above example were to escalate to $300,000, you could risk over-improving for the neighborhood. It's not a good idea, from an investment standpoint, to