A reader sent this in (thank you):
Hey there.
After hearing arguments asserting how much wealth is driving "prime" SFBay real estate values, I thought I'd do a little research. While many have a general feel for how long property is sitting, I thought I'd graphically illustate the hard truth for an undisputed "prime" market. The attached file is a direct screen dump from Ziprealty's map search feature, displaying all home listings for Tiburon area--with DOMs added in black. No "cherry picked" data here, and people can make their own conclusions. If you find this compelling, post it to the blog.
12 comments:
I have to say I don't find this compelling. Mapping the most expensive properties in the Bay Area is not an accurate representation of the BA as a whole. Expensive properties (read: $1.5m +) always sit much longer than those that are more "affordable" to a broader population.
A much more compelling map would be for those properties around Marin/Bay Area that fall within the "hot" price ranges: $500k to $1.2m. Those are the properties that in the past few years have sold quickly. Tracking this group over time will give a much better picture of the cooling of the market.
Hey Marinite: check out this new Mill Valley listing: MLS number 20634521. Priced at $849,000 and only 903 square feet. That's $940.20 per square foot for this "cottage." Another flip, perhaps? Wait - that doesn't happen in Marin... I personally think that all of the really crazy prices should be pointed out to everyone on this blog. Getting the word out is the quickest way to change this pricing scenario.
That's what it says. I wonder if it's Agassi's house?
I have to say I don't find this compelling
Perhaps not, but the chart is what it is.
Granted, sales in Marin for homes over $1M are pretty stagnant. And $1M+ listings are fairly common in Marin--especially now. With that in mind, I made this chart to address several points:
1. Time after time, I've heard that bay area housing prices are driven by an influx of high-tier wage earners; it's simply no longer the place for median-professional workers. If you don't make the elusive "golden wage," you don't belong here. So is the bay area crawling with excessive wealth buying up those exclusive properties? If that’s true, is it indicated by home sales in “prime” locations like Tiburon and Belvedere? It appears to me there are actually a very limited number of wealthy across the Bay Area to drive prices--as many no doubt suspected.
2. Another common assertion I hear is how our location and homes are so desirable that demand will continue, despite how inflated prices become. Again, even Bel-Tib appears to have a price ceiling. The same is undoubtedly true for other locations and price segments.
Those are just some of my personal conclusions. Let each decide for themselves, as there’s plenty of good data to on this site help in your conclusion.
"so is the bay area crawling with excessive wealth buying up those exclusive properties?"
Seems like some people think it is. A company from Colorado has broken ground on almost 2000 homes and condos at Northstar at Tahoe that start at well over $1,000,000 each. In addition to a slopeside Ritz Carlton, they expect to complete construction in 3 years.
http://tinyurl.com/quspa
With the target buyers almost entirely from the Bay Area, it really makes me wonder...are there really that many people with that kind of dough for second homes??
Marnin_explorer -
Exactly. This claim that Marin is awash with wealth is a crock. At least, they aren't particularily active buying expensive houses. The DOM figures show it.
And the bubble seems to have primarily hit Marin's "lower end" priced houses and not as much the higher priced houses.
2000 homes and condos at Northstar at Tahoe that start at well over $1,000,000 each...in 3 years.
Great timing! But I'm sure the market looked very promising when they brought this deal together. Last I looked, there's already a glut of vacation homes and condos around Northstar. Great deal for future skiers.
Marin having a lot of money among it's occupants is not a claim, it is a fact. However that is tempered with the fact that there are also a lot of people in marin whom are not to be considered "wealthy". Marin as a whole is middle class like everywhere else, but Tiburon-Belvedere is certainly in a vacuum, a place with very wealthy people as a community. It's one of those "different" places. I don't believe you can extract a lot of useful data just from this. Of course, people are simply not trading real estate much right now for sense of the market.
It's like saying San Diego is represented by La Jolla. Simply not the case, but there are communities inside that have a high proportion of wealthy people.
Marin having a lot of money among it's occupants is not a claim, it is a fact. However that is tempered with the fact that there are also a lot of people in marin whom are not to be considered "wealthy". Marin as a whole is middle class like everywhere else, but Tiburon-Belvedere is certainly in a vacuum, a place with very wealthy people as a community. It's one of those "different" places. I don't believe you can extract a lot of useful data just from this. Of course, people are simply not trading real estate much right now for sense of the market.
It's like saying San Diego is represented by La Jolla. Simply not the case, but there are communities inside that have a high proportion of wealthy people.
Anon 11:46-
I think we're making the same point from different directions. Whether we're in San Diego, Santa Barbara, Marin, or Seattle, there's only so much local wealth to drive these markets. No smaller segment of wealth supplants the greater whole, which was also my point.
I am very familiar with Marin - and many of these properties have been on the market way too long. The prices are clearly wrong when the merch isn't moving.
I find this data compelling. Thanks for posting it.
I have heard that the upper end (of re) is impervious to supply and demand. No it's not..
Regarding north Tahoe homes, condos, what have you...
I have followed Truckee area inventory on occasion over the last 1.5 years, and I'm happy to report that in the price ranges around the median, inventory there is nearly 3x more than it was one year ago.
House prices are going to be going down, if only slowly, for years and years up there.
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