Some choice quotes:
"Despite a growing inventory, the next 12 months will show fewer sales, and here’s why: only 11% of homeowners in Marin could afford to buy their own house today, according to the California Association of Realtors. The median price is nearly one million dollars, and with 20% down payment you would need an income of nearly $250,000. Until earnings increase, rates go down, prices decline, or some combination of these happens, appreciation will slow and sales will turn down."
"Of the 3,500 homes sold past 12 months, 2,327, or 2/3 were below $1m. Rising prices is rapidly drying this market segment up, and we have finally priced ourselves out of the entry-level market."
"The median price of single-family homes peaked in July at $1,033,500 and has fallen each month since."
That last statement is incorrect. The peak of $1.0335 million was in June, not July. So prices have declined each month since then.
10 comments:
"Until earnings increase, rates go down, prices decline, or some combination of these happens, appreciation will slow and sales will turn down."
What is the likelihood of earings increasing significantly so as to approach the 250,000 income needed to buy the median house in Marin? Less than 0.01 I'd wager.
What is the likelihood of rates going down? Pretty small as the Fed has made clear they are only going to go up.
That leaves only one option.
Eat your heart out Marin.
I remember an article in the SF Chron earlier this year, over 70% of Marin County mortgages in 2005 were interest only loans. People don't "have" the money to pay these crazy prices. Higher rates & tighter lending standards, plus all the negative press about RE, should do the trick. Glad I sold last year is all I can say.
over 70% of Marin County mortgages in 2005 were interest only loans.
Right--why live in Novato on a fixed-rate, when you can hobnob in Tiburon on an I-O? I'm sure quite a few people "bought up", but are living 'just above water' for that desireable zip code. Those stats are rather shocking; Marin won't fare any better than Sacramento if rates continue rising.
Glad I sold last year is all I can say.
Smart man! Here's to you...
"why live in Novato on a fixed-rate, when you can hobnob in Tiburon on an I-O?"
That is just so classic Marin.
"Glad I sold last year is all I can say."
Smart man! Here's to you...
Yes, well done. Good timing.
"over 70% of Marin County mortgages in 2005 were interest only loans"
Do you have a link backing that up? I believe you, I just would love to post that stat.
Home prices in Marin will be slow to decline. It's really hard for sellers to lower the price. I saw a couple open houses today that have been on the market for three months or so. The owner of each house has just lowered to the price, but only modestly.
Home prices in Marin will be slow to decline. It's really hard for sellers to lower the price.
Agreed--so many people have been literally brainwashed by the idea that Marin is somehow above the market dynamics. Well, when outlying areas draw off demand while Marin won't budge on price, selling wil only get more desperate.
"What makes you think everybody needs an income to buy a house?...Maybe you don't make enough, but I would venture to guess that most people I know either have a household income over 200k"
Could anyone chime in here and give the affordability stats for Marin? I seem to recall that only 10% of people in Marin can afford the median home, which strikes me as a problem--and I'm no "bitter renter". Unless I see specific stats, those who don't need to work to buy a Marin home are certainly a minority. And why drop $1.5M on a home when a something comparable can be rented for $2500/mo?
Yes, it is 10 or 11% of Marin residents can afford the median priced house in Marin. That's assuming the traditional 20% down, 30 year fixed rate bla bla bla. The median income in Marin last year was around $71K.
fredtobik -
If your friends can afford not to work why would they care about getting the mortgage interest deduction? That doesn't make a lot of sense to me. Why wouldn't they take some of their vast wealth and buy nontaxable, income generating bonds or whatever?
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