The biggest surprises in the housing market.
A: One big surprise continued to overshadow all others in 2014: the continued lack of inventory (homes) for sale.
A typical supply of inventory in Marin is about 4.5 months. The highest level we saw was 2.3 months in May and again in September — so at best, only about half of our normal supply. This was despite a second year of double- digit home price appreciation (approximately 15 percent in 2014).
With median home prices of just over $1 million, it was surprising that more sellers are not finally making long-delayed home ownership changes, and putting their homes up for sale.
The second big surprise in the market was the frequency of all cash and/or contingency-free (i.e. no contingencies for inspections, loans and/or appraisals) offers. “All cash” buyers were active in most multiple-offer situations and for Buyers using mortgage financing, we saw them writing contingency free offers as a way of competing more successfully against “all cash” buyers.
In the face of strong price appreciation, buyers concluded that it could ultimately be less expensive to absorb contingency risks than to lose the home and have to compete again on the next home, the price of which will have been driven up from the very sale for which they were competing.
Susan Coleman, Coldwell Banker, Greenbrae, (415) 925 3264, scoleman@cbnorcal.com
A: We would have to say the biggest surprise to us in 2014 was the continued lack of inventory of homes for sale across the county. For almost three years now, buyers have had few homes to choose from, and as buyers compete for the few properties available, bidding higher and higher, prices have gone up.
A prime example of this was a Corte Madera listing our office, listed at $850,000, which came on the market a couple of weeks ago, in the huge storm, right before the holiday (typically not the optimum time), and still the listing agent was able to garner 11 offers for the sellers.
The number of homes for sale in Marin County has also gone down since last year, with 357 homes available at this time, and 432 at this time last year.
Lack of inventory will continue to be an issue as we head into 2015, with sellers still facing the dilemma of not knowing what they can buy, and even temporary rentals difficult to obtain.
Despite some extreme market imbalances, there were successes to be won by both buyers and sellers.
Kathleen Daly, Coldwell Banker, (415) 925-3205, kdaly@cbnorcal.com; Lisa Lange, Coldwell Banker, 415-464-3318, lisalange@coldwellbanker.com
A: Stock options and venture capital. Never having been in the technology field, these are two variables that I have only recently began to understand. Companies have certainly done very well making a handful or maybe fistful of their employees wealthy overnight.
This in turn has changed spending habits on homes to a point where buying the home of your dreams with “found money” is an easier spend. I know these individuals put in countless hours and took a bet on an unproven commodity, but in doing so they also reaped the rewards of the stock option liquidity. The breadth and depth of the current market is a bit mind boggling since there are several stories of companies selling for 50 million to billions of dollars. We are fortunate where we live and with all of the high tech companies taking larger stakes in the Bay Area, we hope the growth continues.
This, coupled with a lack of supply, continues to push our selling prices to new highs. A couple other factors of note: We continue to see our older constituency living longer and possibly outliving their savings or lifestyle. Last but not least, keep your eye on interest rates. We were supposed to see a spike to 5 percent on interest rates that never panned out. However, refinancing now will make you look very smart when interest rates do start to rise.
Matt Heafey, the Grubb Co., (510) 339-0400, Ext. 245, heafey@grubbco.com