3rd Quarter North Bay Report

Patricia Carapiet
Paragon Real Estate Group

3rd Quarter Real Estate Market Report
for Marin, Napa & Sonoma Counties

October 2014 Update by Paragon Real Estate Group


North Bay Home Appreciation since 2011

In the last 2 quarters, as the market continued to appreciate, North Bay home values hit their highest points since the bottom of the market in 2011. Below are snapshots of the increase in median sales prices and average dollar per square foot values for selected, representative cities.

Generally speaking, the biggest jumps are for those areas - usually at the lower price ranges - hit hardest by the foreclosure/distressed property crisis (now rapidly dwindling): Their values took the biggest hit during the downturn and are now experiencing a bigger rebound.

Note that these median and average statistics can be affected, and affected differently by a variety of factors. Appreciation rates for the same city can vary between the two statistics (see Healdsburg & Ross/Kentfield below). As one example, all things being equal, bigger houses typically sell for higher prices, but lower dollar per square foot values than smaller ones. These numbers should be considered very general and approximate indicators of market conditions.

Though North Bay homes are not cheap by state or national standards, all 3 counties offer substantial discounts in price - significantly bigger discounts in Sonoma and Napa than in Marin - when compared to homes of similar size, quality and neighborhood ambiance in San Francisco. Even in Marin, which has long been one of the wealthiest counties in the country, home prices generally run 25% to 40% lower than for comparable homes in the city. This along with school and quality of life issues is a major factor behind buyer demand here.


Sales Price to Original List Price (SP-OP)

The first chart illustrates the trend of average percentage of original list price achieved upon sale over the past few years: The higher the percentage the greater the buyer competition for new home listings. The North Bay has been experiencing a strong seller's market, but not the feeding frenzy of San Francisco, where the SP-OP percentage hit an astounding 109% this past spring.

The second chart delineates the difference in the SP-OP percentage and average days on market between homes that sold with and without price reductions. The 71% of North Bay home sales that sold without price reductions in the 3rd quarter averaged a sales price 2% above asking price, with an average days-on-market of 45 days. Those selling after price reductions took 2 months longer to sell at an average discount of 10% off original list price. And for every 4 sales, 1 listing expired without selling, typically due to being perceived as overpriced.

Even in a seller's market, correct pricing, preparation and marketing are key to achieving the desired end result.


Market Dynamics Snapshots

Months Supply of Inventory & Average Days on Market

These are 2 classic indicators of trends in supply and demand: The lower the readings, the stronger the demand as compared to the supply of homes available to purchase. As indicated in the county breakdowns, the Marin and Sonoma homes markets have been somewhat stronger than the Napa market recently.


Where Do the Sales Occur?

Looking at the respective sizes of North Bay town and city markets by quantity of sales provides further insight into the supply side dynamic: Some of our local markets are very small and very exclusive indeed. Santa Rosa, for example, sells about the same number of homes in a week as Belvedere does in a year. Of course, the median home price in Santa Rosa is less than 17% that of Belvedere: Though there are clearly other factors at play, the extremely low inventory of homes available to purchase in Belvedere does play a role in its extremely high home values.

Please call or email if you have any questions or comments regarding these analyses.

Fluctuations in median sales prices and average dollar per square foot values are not unusual and these fluctuations can occur for other reasons besides changes in value, such as seasonality; inventory available to purchase; availability of financing; changes in buyer profile; and changes in the distressed and luxury segments. How these statistics apply to any particular property is unknown without a specific comparative market analysis. All data from sources deemed reliable, but may contain errors and is subject to revision.

(c) 2014 Paragon Real Estate Group
No one knows Bay Area real estate better than Paragon.
Paragon Real Estate Group
(415)738-7000 | (415)565-0500 | www.paragon-re.com/
Patricia Carapiet
Lic# 00895957
1400 Van Ness Avenue
San Francisco, CA 94109
Direct (415) 738-7218
Cell 415.990-9125
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