Strong Start to 2014 North Bay Homes Market
April 2014 Market Report for Marin, Napa & Sonoma Counties
It's not unusual for the first quarter to be relatively slow, but this year buyer demand woke up early and jumped back into the real estate market - probably an indication of the start to another heated spring selling season. Median home sales prices continued to climb in all three counties, and according the California Association of Realtors, Marin currently has the highest, overall, median sales price in the state.
One factor impacting the markets in Napa and Sonoma is the big jump in second home sales across the country. As the economy has recovered, this market segment is surging again, as was well covered in the April 3rd Wall Street Journal article, "Wealth Effect Drives Vacation Home Sales."
1st Quarter Snapshot
More than two thirds of North Bay home sales in the first quarter sold without going through price reductions, to close at an average sales price less than 1% below asking price. Those homes that were not priced correctly to begin with averaged 3 months longer on the market and sold at an average discount of 12% off original list price. As of the end of March, the Months Supply of Inventory (MSI) of homes available to purchase was extremely low at 1.4 months: This would typically be considered an indicator of a strong sellers' market.
30+ Years of Real Estate Cycles
According to the latest S&P Case-Shiller Index report (through January 2014), higher-priced Bay Area homes ($800,000 and above) have now fully re-attained their previous peak values of 2006-2007 - as can be seen in the chart below amid the context of repeating real estate cycles. Homes in the two lower price segments (not charted here) have also made strong recoveries in the past 2 years, but since they experienced much larger bubbles and crashes, are still 15% to 30% below their previous peak values.
Case-Shiller Index numbers are based on January 2000 home prices equaling 100 and all other numbers refer to this. Thus a Case-Shiller reading of 184 signifies home prices that are 84% above those of January 2000.
Median Sales Price Appreciation
These 3 charts look at the quarterly progression of median sales price increases in each county since the market recovery began in earnest in 2012. Note that median prices often fluctuate on a short-term basis, and can be affected by other factors besides changes in values, such as seasonality, inventory available to purchase, changes in the distressed and luxury home segments and financing terms. It is the longer-term trend that is most meaningful.
North Bay Home Prices by City
These tables review, by city and bedroom count, the number of sales over the past year, the median sales price and average dollar per square foot value, and the highest sale during the period. In Napa and Sonoma counties, the largest sale in a category is often a ranch or vineyard estate with extensive acreage.
Comparative Home Prices around the Bay Area
It's always interesting to see the huge range of home prices across different neighborhoods and cities. With real estate, the foundation of values always begins with location.
Paragon Featured in New Ranking Report
The new RealTrends 500 report ranking the sales statistics of the 500 largest residential brokerages in the country for 2013 sales was just published. After 10 years in business, Paragon came in #3 in average sales per agent and #4 in average sales price in the national ranking.
Please call or email if you have any questions or comments regarding these analyses.
The median sales price is that price at which half the sales occurred for more and half for less. It is a very general statistic and usually conceals a wide range of prices in the underlying individual sales.
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, and changes in buyer profile. 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